Question

Sales revenues are usually considered earned when an order is received. cash is received from credit sales. adjusting entries are made. goods have been transferred from the seller to the buyer.

Answer 1

Answer:

The answer is C. goods have been transferred from the seller to the buyer

Explanation:

Revenue Recognition states one should recognize revenue when it is earned and not only when cash is received.

Option C. is correct.

When goods have been transferred from the seller to the buyer, it means the buyer has bought something and the ownership and risk for the asset have been transferred to the seller. Well, this doesn't say whether cash is received at the point of exchange or not but revenue has been earned.

Option A is wrong. This transaction affects accounts receivable because revenue for this must have been collected before