Question

When the entity has substantially accomplished what it must do to be entitled to the benefits represented by the revenues, revenues are considered

a. earned.
b. realized.
c. recognized.
d. All of these answers are correct.

Answer 1

Revenues are considered recognized when the entity has substantially accomplished what it must do to be entitled to the benefits represented by the revenues. This occurs when the revenue is earned, realized, and recognized.

Step-by-step explanation:

When the entity has substantially accomplished what it must do to be entitled to the benefits represented by the revenues, the revenues are considered recognized.

Recognition of revenues occurs when the revenue is earned, realized, and recognized.

For example, if a company sells goods to a customer and the customer has received the goods and the company has the right to receive payment, the revenue from the sale is considered recognized.