WAEC SSCE - Financial Accounting - 2006 (Objective)

Question 1 Report

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

debtor pays what is due from him

sale of goods takes place and money is received

sale of goods takes place whether or not money is received

sales of a fixed asset takes place

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.






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