Which of the following statements best describes the recognition of revenue? A.

Question

Which of the following statements best describes the recognition of revenue?

A. Governments recognize revenues from exchange transactions when the cash is received, and, for nonexchange transactions, when the resources are available to satisfy existing liabilities.

B. Governments recognize revenues from exchange transactions when the transactions take place, and, for nonexchange transactions, when it is probable that resources will be received in the current year.

C. Governments recognize revenues from exchange transactions when the transactions take place, and, for nonexchange transactions, when the resources are available to satisfy existing liabilities.

D. None of the above

Explanation / Answer

The correct answer is option (C). Governments recognize revenues from exchange transactions when the transactions take place, and, for nonexchange transactions, when the resources are available to satisfy existing liabilities.

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