Revenues are recognized when they are:
A)Earned and have received cash
B)Received cash
C)Earned and realized
D)Realized

Question

Quizplus · Accepted Answer

Revenue should be recognized when it is earned and realized, meaning that the seller has performed all or substantially all of the obligations under the agreement, the price is fixed and determinable, and collectibility is reasonably assured. Receipt of cash is not necessary for revenue recognition. Option A is incorrect because revenue can be earned but not yet received in cash. Option B is incorrect because revenue recognition is not solely based on receiving cash. Option D is incorrect because revenue recognition is based on earning and realizing the revenue.

Revenues Are Recognized When They Are