Under the earnings approach, revenue is recognized by the consignor when the
A)goods are shipped to the consignee.
B)consignee receives the goods.
C)consignor receives an advance from the consignee.
D)consignor receives an account sales from the consignee.

Question

Quizplus · Accepted Answer

Revenue is recognized by the consignor when they receive an account sales from the consignee, which indicates that the goods have been sold by the consignee and the revenue is earned by the consignor. The shipment of goods or receipt of an advance payment by the consignor does not necessarily indicate that revenue has been earned.

Under the Earnings Approach, Revenue Is Recognized by the Consignor