Under accrual basis accounting, when is revenue recognized?

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Multiple Choice

Under accrual basis accounting, when is revenue recognized?

Explanation:
Under accrual accounting, revenue is recognized when earned. This means you record revenue at the time you have delivered the goods or performed the service and have a right to payment, even if cash is received later. The timing is tied to when the earning activity occurs, not to when cash is collected. This differs from recognizing revenue only when cash is received, or only at year-end, or based on when an expense is paid. Recognizing revenue when earned also aligns with matching revenues to the period in which the related goods or services were provided.

Under accrual accounting, revenue is recognized when earned. This means you record revenue at the time you have delivered the goods or performed the service and have a right to payment, even if cash is received later. The timing is tied to when the earning activity occurs, not to when cash is collected.

This differs from recognizing revenue only when cash is received, or only at year-end, or based on when an expense is paid. Recognizing revenue when earned also aligns with matching revenues to the period in which the related goods or services were provided.

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