Which of the following must exist prior to the recognition of revenue by a company from the sale of a product?
A) The cash is realized on the sale of the product.
B) A price is discussed based upon the customer's resale of the product.
C) The customer is given the option to return the product at any time.
D) The product is adequately delivered to the customer.

Question

Quizplus · Accepted Answer

Adequate delivery of the product to the customer is a necessary condition before revenue recognition. The other options are not directly related to revenue recognition, as cash realization and price discussions do not confirm the completion of a sale and the option to return the product affects the return process but not the revenue recognition.

Which of the Following Must Exist Prior to the Recognition