Final answer:
Revenue recognition criteria include having persuasive evidence of an arrangement, delivery of goods or providing services, and reasonable assurance of collection. Negotiable prices and absolute assurance of collection are not required for revenue recognition.
Step-by-step explanation:
The criteria for revenue recognition typically include several key conditions that must be met before revenue can be recognized in the accounting records. The correct options from the list provided by the student are:
- Persuasive evidence of an arrangement exists - There should be a formal agreement that indicates both parties have an understanding and commitment to exchange goods or services.
- Delivery has occurred or services have been provided - The goods have been shipped or services have been performed, essentially transferring the risks and rewards of ownership to the buyer.
- Collection is reasonably assured - The seller believes that the amount owed will be collected based on the buyer's creditworthiness and payment history.
The seller's price to the buyer being negotiable does not necessarily inhibit revenue recognition. Similarly, collection being absolutely assured is not a requirement, as there is often inherent uncertainty in business transactions.