Revenue generally should be recognized
A) at the end of production.
B) at the time of cash collection.
C) when realized.
D) when the performance obligation is satisfied.

Question

Quizplus · Accepted Answer

Revenue should be recognized when the performance obligation (i.e. delivery of goods or services) is satisfied, meaning the customer has received and accepted the goods or services. This is in accordance with the principles of accrual accounting, which requires revenue recognition to be tied to the timing of when the transaction occurs, rather than when cash is received.

Revenue Generally Should Be Recognized