Question

Revenue from a contract with a customer cannot be recognized until a contract exists. is recognized even if the contract is still wholly unperformed. can be recognized even when a contract is still pending. is recognized when the customer receives the rights to receive consideration

Answer 1

cannot occur until a contract exists.

Step-by-step explanation:

Revenue according to GAAP Definition is simply said to be increase or decrease of asset and/or combination of both by production or goods delivery, or offering services that are all about a major running operations. Revenue Recognition also according to GAAP is the Revenue is known(recognize) when it has been realized and earned.

SEC Criteria to Recognize Revenue are the evidence of an arrangement exists, Goods Delivered or Services Rendered and others.

Revenue from a contract with a customer cannot be recognized until a contract exists which form the beginning of the contract.