Learning Objective $06-02$ Explain when it is appropriate to recognize revenue at a single point in time.

Skip to question

$[$The following information applies to the questions displayed below.$]$

Revenue should be recognized at a single point in time when control of a good or service is transferred to the customer on a specific date. Indicators that transfer has occurred and that revenue should be recognized include the seller having the right to receive payment, the customer having legal title and physical possession of the asset, the customer formally accepting the asset, and the customer assuming the risks and rewards of ownership.

Recognizing Revenue at a Single Point in Time

Knowledge Check $01$

Which of the following would indicate that control has passed from the seller to the customer?

Note: Select all that apply.

Check All That Apply

The asset is warehoused by a seller$-$affiliated third party.

The asset is warehoused by a seller$-$affiliated third party.

Legal title to the asset has passed to the customer.

Legal title to the asset has passed to the customer.

The customer has assumed the risks and rewards of ownership of the asset.

The customer has assumed the risks and rewards of ownership of the asset.

The customer has an obligation to pay the seller.