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9 votes
9 votes
would you recommend that accountants wait until collections are made from customers before recording sales revenue

User Verdammelt
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1 Answer

21 votes
21 votes

Answer: No

Step-by-step explanation:

Accounting currently uses the Accrual basis and this is the best basis to use so far because it records revenue when they are earned not when the actual money comes in.

In doing this, the company is able to properly ascertain the revenue that it made in a particular period. If a company were to wait until collections were made, the company might wait for over one period to record their sales which would not be very helpful in calculating income for the period.

Also if companies waited to record only after sales, people not paying and becoming doubtful debts become a headache to record.

User CascadiaJS
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