Asked by Jalyn Lankford on Apr 28, 2024
Verified
The earliest moment that the critical event and measurability are both satisfied for revenue recognition is usually
A) before the sale.
B) after the sale.
C) at the time of sale.
D) when payment is receiveD.
Critical Event
A significant occurrence that has a profound impact on an entity's operations or financial performance, necessitating special consideration in accounting and financial reporting.
Measurability Conditions
Criteria that determine when revenue can be recognized in the accounting process, ensuring it can be reliably measured.
- Learn about the divergences and similarities in the treatment of revenue recognition within U.S. GAAP and IFRS.
Verified Answer
JK
Jeannine KocisApr 29, 2024
Final Answer :
C
Explanation :
The critical event for revenue recognition is the transfer of control of goods or services to the customer. Measurability requires that the amount of consideration being received for the goods or services can be reliably measured. Both of these conditions are usually satisfied at the time of sale, making choice C the correct answer. A, B, and D are not typically the earliest moments that these conditions are met.
Learning Objectives
- Learn about the divergences and similarities in the treatment of revenue recognition within U.S. GAAP and IFRS.
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