Question

According to GAAP, when is revenue recognized on an income statement? Select all that apply

a. Multiple select questions.after the related expenses are paid in full
b. when the earnings process is virtually completed
c. when the value of an exchange of goods or services is known or reliably determined
d. only when cash has been received for the sale

Answer 1

Revenue is recognized on an income statement when the earnings process is virtually completed and the value of an exchange of goods or services is known or reliably determined, according to GAAP.

Step-by-step explanation:

According to Generally Accepted Accounting Principles (GAAP), revenue is recognized on an income statement when the earnings process is virtually completed and the value of an exchange of goods or services is known or reliably determined. Revenue is recognized on an income statement when the earnings process is virtually completed and the value of an exchange of goods or services is known or reliably determined, according to GAAP.

It is important to note that revenue recognition is not dependent on when the related expenses are paid in full or when cash has been received for the sale. The focus is on when the transaction has occurred and the value can be reasonably assessed.