A flower shop makes a large sale for $1,200 on November 30.The customer is sent a statement on December 5 and a check is received on December 10.The flower shop follows GAAP and applies the revenue recognition principle.When is the $1,200 considered to be recognized?

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Quizplus · Accepted Answer

According to the revenue recognition principle under GAAP, revenue is recognized when it is earned and realizable, regardless of when the cash is received. In this case, the sale was made on November 30, so the revenue is recognized on that date.

A Flower Shop Makes a Large Sale for $1,200 on November