A business organisation received an advance amount in January, 2016 for the sale made in May, 2016. When will be the revenue recognised?

Asked by Topperlearning User | 9th Jun, 2016, 12:29: PM

Expert Answer:

Revenue is considered to have been realised when a transaction has been entered into and the obligation to receive the amount has been established. 

Here, the revenue will be recognised in the month of May, 2016 because the legal option to receive the amount would be established in May 2016.

Answered by  | 9th Jun, 2016, 02:29: PM