Generally, when is the earliest point in the sales and collection cycle in which revenue can be recognized?
A)When the sale is approved
B)When the credit approval process is finalized
C)When the cash is collected
D)When the goods have been shipped

Question

Quizplus · Accepted Answer

The earliest point in the sales and collection cycle in which revenue can be recognized is when the goods have been shipped. This is because at this point, the seller has fulfilled its obligation to transfer ownership and risks associated with the goods to the buyer, and the buyer is obligated to make payment. However, revenue recognition should only occur if it is probable that economic benefits from the transaction will flow to the seller and the amount of revenue can be reliably measured.

Generally, When Is the Earliest Point in the Sales and Collection