The following represents the five steps in the revenue recognition model, in random order:

Business

1 answer:

rosijanka [135]3 years ago

3 0

Answer:

The correct order is 5-4-1-3-2

Explanation:

Revenue Recognition is a Generally Accepted Accounting Principle which outlines the specific conditions in which revenue must be recognized and also stipulates ways and when to account for it. The order of the revenue recognition model is:

Identify the contract with a customer.
Identify the performance obligations in the contract.
Determine the transaction price.
Allocate the transaction price to the performance obligations in the contract.
Recognize revenue as the entity satisfies performance obligations.

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