Under accrual accounting, when is revenue recognized?

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Multiple Choice

Under accrual accounting, when is revenue recognized?

Explanation:
Under accrual accounting, revenue is recognized when the seller has completed its performance obligation—when goods are delivered or services are performed—and when collection is reasonably assured. This aligns revenue with the period in which the economic activity occurs, not when cash actually changes hands. So revenue is recognized when earned. Cash receipt timing, year-end timing, or certainty of payment do not determine recognition under accrual accounting.

Under accrual accounting, revenue is recognized when the seller has completed its performance obligation—when goods are delivered or services are performed—and when collection is reasonably assured. This aligns revenue with the period in which the economic activity occurs, not when cash actually changes hands. So revenue is recognized when earned. Cash receipt timing, year-end timing, or certainty of payment do not determine recognition under accrual accounting.

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