Chen Alterations Company follows the revenue recognition principle. Lynn Chen altered a tuxedo on April 30. The customer picks up the tuxedo on May 1 and mails the payment to Chen on May 5. Chen receives the check in the mail on May 6. When was Chen's performance obligation satisfied?

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The performance obligation was satisfied on April 30 when the alteration service was completed. According to the revenue recognition principle, revenue is recognized when the service is performed, regardless of when payment is received.

Chen Alterations Company Follows the Revenue Recognition Principle