On December 15,2015,a company receives an order from a customer for services to be performed on December 28,2015.Due to a backlog of orders,the company does not perform the services until January 3,2016.The customer pays for the services on January 6,2016.The revenue principle requires the revenue to be recorded by the company on:

Question

Quizplus · Accepted Answer

The revenue principle states that revenue should be recognized when earned, which means when the services are performed. In this case, the services were not performed until January 3, 2016, so that is the date when the revenue should be recorded. The fact that the customer paid on January 6, 2016 is irrelevant to the recognition of revenue.

On December 15,2015,a Company Receives an Order from a Customer