According to generally accepted accounting principles (GAAP), revenue is recognized as income when:

a contract is signed to perform a service or deliver a good.

managers decide to recognize it.

payment is requested.

income taxes are paid on the revenue earned.

the transaction is complete and the goods or services are delivered.

Question

Elizabeth Wheeler

Business

3 April, 19:27

According to generally accepted accounting principles (GAAP), revenue is recognized as income when:

a contract is signed to perform a service or deliver a good.

managers decide to recognize it.

payment is requested.

income taxes are paid on the revenue earned.

the transaction is complete and the goods or services are delivered.

+5

Answers (1)

Know the Answer?

Julien Case · Answer 1

the transaction is complete and the goods or services are delivered.

Explanation:

According to generally accepted accounting principles (GAAP), the revenue should be recognized when the goods or services are delivered and the transaction is completed in all respects.

The revenue recognition principle applies when the revenue is realized or earned whether cash is received or not plus it also follows the accrual basis of accounting. Here, realizable means that customer received the product but the payment is made at the later date