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17 October, 08:27

A flower shop makes a large sale for $1,500 on June 30. The customer is sent a statement on July 5 and a check is received on July 10. The flower shop follows GAAP and applies the revenue recognition principle. When should the $1,500 be recognized

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  1. 17 October, 08:36
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    June 30

    Explanation:

    As per the revenue recognition principle, the revenue is recognized when it is earned or realized that means service is performed but the payment is not made at the time of providing the service.

    It is not get impacted when will be the cash received.

    So, in the given case, the large sale is made on June 30 and on June 30 the revenue would be recognized.
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