Accountants should be under orders to record sales and accounts receivable when
A) The customer's order is received.
B) All supporting documentation of shipping is in order.
C) The item has been paid for.
D) The terms are agreed upon.

Question

Quizplus · Accepted Answer

Recording sales and accounts receivable should be done when all supporting documentation of shipping is in order. This indicates that the product has actually been shipped to the customer, and therefore, the revenue can be recognized, and accounts receivable can be recorded. The customer's order being received or the terms being agreed upon does not necessarily indicate that the product has been shipped or that revenue can be recognized. Payment is not required for recognizing revenue or recording accounts receivable.

Accountants Should Be Under Orders to Record Sales and Accounts