Revenue cannot be recognized unless delivery of goods has occurred or services have been rendered.

Question

Quizplus · Accepted Answer

This is a basic principle of revenue recognition known as the "revenue recognition principle". It is outlined in various accounting standards, including ASC 606 (US GAAP) and IFRS 15 (IFRS). Revenue is only recognized in the financial statements when it is earned, meaning when goods or services have been delivered or performed.

Revenue Cannot Be Recognized Unless Delivery of Goods Has Occurred