A company received an order from a customer in June for services to be provided.Those services were provided in July,and the customer paid the full amount in August.According to the revenue recognition principle,in which month should the company record revenue?
A)June.
B)July.
C)August.

Question

Quizplus · Accepted Answer

According to the revenue recognition principle, revenue should be recognized when the services are provided, which was in July in this case. Therefore, the company should record revenue in July when the services were provided, not in June when the order was received, or in August when the payment was received.

A Company Received an Order from a Customer in June