A dress shop makes a large sale for $1,000 on November 30. The customer is sent a statement on December 5 and payment from the customer is received on December 10. The dress shop follows GAAP and recognizes revenue accordingly. When is the $1,000 considered to be earned?

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Under GAAP, revenue is recognized when it is earned and realizable, regardless of when payment is received. The sale was made on November 30, so the revenue is considered to be earned on that date.

A Dress Shop Makes a Large Sale for $1,000 on November