According to GAAP, revenue is recognized as income when:
A) a contract is signed to perform a service or deliver a good.
B) the transaction is complete and the goods or services delivered.
C) payment is received.
D) income taxes are paid.

Question

Quizplus · Accepted Answer

According to GAAP, revenue is recognized as income when the transaction is complete, and the goods or services are delivered. This is known as the "earnings" concept, which states that revenue should be recognized when it is earned, regardless of when payment is received. Signing a contract or receiving payment are not the determining factors for recognizing revenue. Income taxes paid are also not a relevant factor in revenue recognition.

According to GAAP, Revenue Is Recognized as Income When