Asked by Michael Mocan on May 28, 2024
Verified
Revenues are reported when
A) a contract is signed
B) cash is received from the customer
C) work is begun on the job
D) work is completed on the job
Revenues
The total amount of money received by a company for goods sold or services provided during a specific time period.
Customer
An individual or entity that purchases goods or services from a company.
Job
A specific piece of work or task undertaken for payment or to achieve a particular result, often within the context of employment or contracting.
- Recognize how revenue is earned and reported in financial statements.
Verified Answer
AM
aaliyah mogajiMay 31, 2024
Final Answer :
D
Explanation :
Revenues should be recognized when the work is completed, and the result of the work is transferred to the customer, as stated in the revenue recognition principle. This means that until the work is done, there is no guarantee that the payment will be received from the customer, and the revenue cannot be recognized until that point. Therefore, options A, B, and C are incorrect.
Learning Objectives
- Recognize how revenue is earned and reported in financial statements.