As a general principle, under the accrual basis of accounting, the firm recognizes revenue when the transaction meets which of the following conditions?
A)completion of the earnings process, only
B)receipt of assets from the customer, only
C)completion of the earnings process and receipt of assets from the customer
D)expiration of the warranty period, only
E)receipt of the final payment, only

Question

Quizplus · Accepted Answer

Under the accrual basis of accounting, revenue is recognized when the earnings process is complete and the assets are received from the customer, regardless of when the payment is received or when the warranty period expires. Choice C is the only option that includes both of these conditions.

As a General Principle, Under the Accrual Basis of Accounting