The most common point of revenue recognition is:
A)when the cash is collected from the customer.
B)when the customer elects to issue the check to pay for goods shipped.
C)when the goods are delivered to the customer.
D)as the goods are being produced.

Question

Quizplus · Accepted Answer

Revenue should be recognized when goods are delivered to the customer and ownership of the goods is transferred, as this is considered the point at which the company has fulfilled its obligation to provide the goods to the customer. Collecting cash or producing goods are not necessarily indicators that revenue should be recognized. The customer issuing a check is also not a relevant factor for recognizing revenue.

The Most Common Point of Revenue Recognition Is