Which of the following is a component of the revenue recognition principle?
A) Cash is received and the amount is material.
B) Recognition occurs when the performance obligation is satisfied.
C) Production is complete and there is an active market for the product.
D) Cash is realized or realizable and production is complete.

Question

Quizplus · Accepted Answer

The revenue recognition principle states that revenue should be recognized when the performance obligation is satisfied, which means the goods or services have been provided to the customer. This principle is based on the idea that revenue should be recognized when it has been earned, regardless of when payment is received. The other choices may be factors to consider but are not specific components of the revenue recognition principle.

Which of the Following Is a Component of the Revenue