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

According to the accrual basis of accounting, revenue should be recognized when it is earned, which is typically when the goods or services are shipped or delivered to the customer. Therefore, all supporting documentation of shipping should be in order before recording the sale and accounts receivable. The customer's order being received, payment being received, and terms being agreed upon are not necessarily indicators of when revenue should be recognized.

Accountants Should Be Under Orders to Record Sales and Accounts