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 should be recognized when the performance obligation is satisfied, which in this case is when the drill press was delivered to the customer. Since the drill press was delivered two weeks after November 14, the revenue should be recognized in November, the month of delivery.

A Customer Purchased a Drill Press on November 14 on Account