Which of the following correctly applies the revenue recognition principle?
A)Recognize revenue in December 2019 for products manufactured but not yet delivered to customers.
B)Recognize cash received in advance from customers as revenue when the product is not yet shipped.
C)Not recognize service revenue in 2019 until the cash is received in 2020.
D)Recognize revenue in December 2019 for products sold but not yet paid for in full.

Question

Quizplus · Accepted Answer

The revenue recognition principle states that revenue should be recognized when it is earned, regardless of when payment is received. Option D correctly applies this principle by recognizing revenue in December 2019 for products sold but not yet paid for in full.

Which of the Following Correctly Applies the Revenue Recognition Principle