On January 15,2014,the Dam-M-Up Company entered into an agreement with Quebec Hydro to build a dam in northern Quebec.Construction will begin on January 1,2015 and will be completed by December 15,2016.According to the matching principle,when should the revenue from this project be recognized?
A) January 15, 2014 (when the contract is signed)
B) As the work is carried out (2015 and 2016)
C) When the work is completed
D) When payment is received

Question

Quizplus · Accepted Answer

Revenue should be recognized as the work is carried out, in accordance with the matching principle, which aligns revenues with the expenses incurred to generate them.

On January 15,2014,the Dam-M-Up Company Entered into an Agreement with Quebec