The revenue principle states that revenue should be recognized at the point when

Question

The revenue principle states that revenue should be recognized at the point when
a.an exchange transaction involving goods and services has occurred and the earnings process is essentially complete.
b. an order for shipment of a definite amount of merchandise has been received
c. a contract between buyer and seller has been signed by both parties
d. the seller has shipped merchandise to a customer under the terms that the customer need not pay for the merchandise until it is sold.

I think its either a or d not sure

Explanation / Answer

It's a. not d because if the customer need not pay for the items until sold it's not a valid revenue recognition, because terms of payment are uncertain.

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