Which of the following transactions should not result in revenue recognition in 2016?
A) Services for a customer were carried out on credit in 2016,to be collected in 2017.
B) Services were carried out for a customer for cash in 2016.
C) Payment was received from a customer in 2016,for services provided in 2015.
D) Goods were sold to a customer on credit in 2016,with cash to be collected in 2017.

Question

Quizplus · Accepted Answer

Revenue recognition principles dictate that revenue should be recognized when the service is performed or the goods are delivered, regardless of when payment is received. Option C describes a scenario where payment is received for services provided in a previous year, which means the revenue should have been recognized in 2015, not 2016.

Which of the Following Transactions Should Not Result in Revenue