Revenues are recognized when __________,even when cash is collected in a different accounting period than the revenue is earned.
A) cash is collected
B) bills are paid
C) services are performed
D) customers prepay for goods/services

Question

Quizplus · Accepted Answer

Revenues are recognized when services are performed, which means that the company has fulfilled its obligation to the customer and earned the right to the revenue. Cash collection is a separate event that may occur in a different accounting period. Therefore, the recognition of revenue does not depend on the timing of cash collection. Bills being paid or customers prepaying for goods/services are also not relevant to the recognition of revenue.

Revenues Are Recognized When __________,Even When Cash Is Collected in a Different