Revenue is recognized in most businesses
A) when the customer's order is received.
B) only if the transaction creates an account receivable
C) only if paid in cash
D) upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price
E) when cash from a sale is received

Question

Quizplus · Accepted Answer

Revenue is recognized when the sale is completed or when services are performed and the business obtains the right to collect the sales price, regardless of whether payment is received in cash or on credit. This is in accordance with the accrual basis of accounting, which matches revenues with expenses incurred to generate them.

Revenue Is Recognized in Most Businesses