Consider a firm that provides services to customers.To record revenue,which of the following conditions must be met?
A) the firm must render the services only
B) the firm must render the services and receive cash or a promise of payment in the future
C) the firm must render the services and receive cash
D) the firm must promise to render the services in the future and receive cash

Question

Quizplus · Accepted Answer

For revenue to be recognized, the firm must have rendered the services and the payment must have been received, or a promise of payment must have been made. Option A does not consider any promise of payment, option C only considers receiving cash, and option D considers a promise to render services in the future, but revenue cannot be recognized until the services are actually rendered. Option B is the best choice because it considers both the rendering of services and a promise of payment.

Consider a Firm That Provides Services to Customers