Except for cash sales, revenue recognition criteria are almost met before the collection of cash; the exception to this is the:
A)completed contract method
B)percentage completion method
C)instalment method
D)recognition of unearned revenue method

Question

Quizplus · Accepted Answer

The instalment method allows for revenue to be recognized as payments are received from the customer, so revenue recognition and cash collection occur simultaneously. The completed contract method and percentage completion method both recognize revenue before cash collection, while the recognition of unearned revenue method pertains to the recognition of liabilities rather than revenue.

Except for Cash Sales, Revenue Recognition Criteria Are Almost Met