Revenue should not be recognized until:
A)The earnings process is complete and collection is reasonably assured.
B)Contracts have been signed and payment has been received.
C)Work has been performed and customer has been billed.
D)Collection has been made and warrantees have expired.

Question

Quizplus · Accepted Answer

Revenue should not be recognized until the earnings process is complete, which means that goods or services have been delivered or performed and the customer has accepted them, and collection is reasonably assured. Contracts being signed, payment received, work performed, and customer being billed are not necessarily indicative of the completion of the earnings process or collection being reasonably assured. Waiting for collection to be made and warranties to expire is also not necessarily indicative of the completion of the earnings process or collection being reasonably assured.

Revenue Should Not Be Recognized Until