When should a company record earnings - when the sale is made or when the customer...
When should a company record earnings - when the sale is made or when the customer actually pays for it? What about expenses; should they be recorded when the expense is incurred or when it is paid?
Homework Answers
Answer-
The earnings should be recorded when the customer actually pays for it not when the sale is made.
As per accrual accounting revenue is recognized when it's earned, and expenses are recognized when they are billed but not paid.
As per cash accounting revenues and expenses are recognized only when money changes hands ie. when they are paid.
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When should a company record earnings - when the sale is made or
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