A customer purchased a drill press on November 14 on account from Sears.The drill press was delivered two weeks later.The customer paid for the drill press on December 5.When should Sears record the revenue for this transaction according to the revenue recognition principle?

Question

Quizplus · Accepted Answer

According to the revenue recognition principle, revenue is recognized when it is earned and realizable. In this case, the revenue should be recorded in November when the drill press was purchased, as that is when the sale was made and the obligation to deliver was fulfilled.

A Customer Purchased a Drill Press on November 14 on Account