Final answer:
Software revenue is typically recognized at the point of sale or upon delivery, especially when the software does not need significant production, modification, or customization. The use of the percentage-of-completion method is more common in long-term contracts rather than straightforward software sales.
Step-by-step explanation:
When a company has an agreement to deliver software that does not require significant production, modification, or customization, different revenue recognition methods may be considered. The percentage-of-completion method is one such method often used in recognizing revenue for long-term contracts. However, for straightforward software sales without significant ongoing input from the seller, revenue is typically recognized at the point of sale or upon delivery under accrual accounting principles.
Production technologies are concerned with the alternative methods of combining inputs to produce output, but in the case of software that doesn't require significant production, this is less relevant for revenue recognition purposes.
Revenue, which is the income from selling a company's product and is calculated by multiplying the price by the quantity sold, would be recognized when control of the software has been transferred to the buyer and the company has the right to payment, indicating that the earnings process is substantially complete.