Revenue generally should be recognized
A)at the end of production.
B)at the time of cash collection.
C)when performance is achieved.
D)when performance is achieved and the amount earned is measurable and collectible.

Question

Quizplus · Accepted Answer

Revenue should be recognized when performance is achieved and the amount earned is measurable and collectible, in accordance with the revenue recognition principle. This means that revenue should be recognized when goods or services are transferred to customers in exchange for payment or when the customer becomes legally obligated to pay. Cash collection may occur before or after revenue recognition, and the timing of production is not a determinant of revenue recognition.

Revenue Generally Should Be Recognized