Consider the following three scenarios:
I. ABC Lawncare performed lawn maintenance services for Drake Inc.
On June 1^st, and received payment of $500 for those services.
II. On June 1^st, Melly Corp received payment for 100 pounds of raw material
To be delivered to Drake Inc. in 6 months.
III. Lodo, LLC collected cash on June 1^st for services rendered on May 1^st.
Given these scenarios, revenue cannot be recognized on June 1^st for:

Question

Quizplus · Accepted Answer

Revenue can be recognized for scenario I because the seller has satisfied a performance obligation. For scenario II, the seller must wait until raw material has been delivered. For scenario III, the seller should have recognized revenue on May 1^st when the performance obligation was satisfied by rendering services.

Consider the Following Three Scenarios