Under which of the following circumstances would revenue normally be recognised?
A) A customer pays an overdue account
B) A customer pays for goods in advance of production
C) The business makes a cash sale of merchandise
D) None of the above

Question

Quizplus · Accepted Answer

Revenue is recognized when there is a sale of goods or services. Option C represents a cash sale of merchandise, indicating that revenue has been earned and received in full. Option A represents a receipt of payment for a past transaction, which does not necessarily represent revenue earned in the current period. Option B represents a prepayment, which cannot be recognized as revenue until the goods or services are delivered. Therefore, option C is the best choice for recognizing revenue.

Under Which of the Following Circumstances Would Revenue Normally Be