Revenue is recognized in the profit and loss account as soon as a

Assessment: WAEC SSCE - Financial Accounting - 2006 (Objective) Subject: Financial Accounting

Question 1 Report

Revenue is recognized in the profit and loss account as soon as a
Answer Details
Revenue is recognized in the profit and loss account as soon as the sale of goods takes place, whether or not money is received. This is because revenue is earned when the company has fulfilled its obligations under the sale agreement, which is the delivery of goods or completion of services, regardless of whether the customer has paid for it yet or not. Therefore, the company can recognize the revenue in its financial statements once the sale has been completed, even if the payment is received at a later date.
Read lesson note on Accounting Concepts (WAEC)
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