Sales revenue

Question

Sales revenue

Quizplus · Accepted Answer

Sales revenue can be recorded before cash is collected, especially in the case of credit sales where customers are allowed to pay later. Cash collections may happen later or in installments, whereas revenue is recognized at the time of sale or delivery of the goods/services. Therefore, sales revenue and cash collections may not always be equal in a given period. Option B is incorrect. Option C is partially correct as credit sales contribute to sales revenue, but not all sales result from credit sales. Option D is incorrect as sales revenue is recognized before cash is collected.

Sales Revenue