Theoretically, for revenue to be recognized the risks and benefits of ownership must have been transferred to the buyer.This refers to
A)expected cash flows being recognized
B)benefits being the expected net cash flows and the risks being the likelihood of another amount of cash being received
C)benefits being properly recorded revenue and the risks being the likelihood of expenses being greater than expected
D)expected revenue being realized

Question

Quizplus · Accepted Answer

The correct answer is B because it accurately describes the concept of recognizing revenue in accounting, where benefits refer to the expected net cash flows from the transaction, and risks involve the uncertainty or likelihood of receiving a different amount of cash than initially expected.

Theoretically, for Revenue to Be Recognized the Risks and Benefits