In general, revenue is recognized when
A) Goods are shipped.
B) It is earned and realized.
C) It is recorded in the sales journal.
D) It is received in cash.

Question

Quizplus · Accepted Answer

Revenue is recognized when it is earned and realized, which means that the seller has performed the necessary obligations to be entitled to the revenue and the collection of that revenue is reasonably assured. Shipping goods or recording revenue in the sales journal may not necessarily mean that the revenue has been earned and realized. Similarly, receiving cash does not always indicate revenue recognition as prepayments or delayed payments can occur.

In General, Revenue Is Recognized When