What criteria must sales transactions meet in order for the seller to recognize revenues before collecting cash?
A)The revenues must be earned (the firm must have achieved substantial performance).
B)The amount to be received must qualify as an asset (there must be a future economic benefit and the amount must be measured with sufficient reliability).
C)The firm must have a reasonable expectation that it will collect the amount owed from the customer.
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

All three criteria (earned revenue, qualifying as an asset, and reasonable expectation of collection) must be met for a seller to recognize revenues before collecting cash. If any one of these criteria is not met, the seller cannot recognize revenue before cash collection.

What Criteria Must Sales Transactions Meet in Order for the Seller