Question

On November 15, Meier Company received $3,000 cash from a customer for services that were performed on November 1. According to the Revenue Recognition Principle, on which date should the revenue be recorded?

Answer 1

Answer:

November 1

Explanation:

As per generally accepted accounting principles (GAAP), when the goods or services are delivered the revenue should be recorded and the transaction done in all respects.

The principle of revenue recognition occurs when the revenue is realized or earned, whether cash is obtained or not and it also meets the accounting accrual basis. Realizable here means that the consumer receives the product but the payment is made later.

Therefore, the revenue should be recorded on November 1