Harvest Catering is a local catering service.Conceptually, when should Harvest recognize revenue from its catering service?

Question

Quizplus · Accepted Answer

Harvest Catering should recognize revenue from its catering service at the date the meals are served, as that is when the service has been completed and the customer has received the benefit of the service. Recognizing revenue at any earlier point (placing the order, mailing the invoice) could result in recognizing revenue for services that have not yet been provided, which would not accurately reflect the company's financial performance. Recognizing revenue at the time of payment could result in delays in revenue recognition if customers take a long time to pay, which could also distort the company's financial performance.

Harvest Catering Is a Local Catering Service