Question

When goods or services are exchanged for cash or claims to cash (receivables), revenues are:

a. Earned.
b. Realized.
c. Recognized.
d. All of these answer choices are correct.

Answer 1

When goods or services are exchanged for cash or claims to cash, revenues are earned, realized, and recognized, meaning all answer choices (earned, realized, recognized) are correct for this situation. Option d.

Step-by-step explanation:

When goods and services are exchanged for cash or claims to cash (receivables), revenues are earned, realized, and recognized. In accounting terms:

• Earned means that the company has performed the service or delivered the goods, fulfilling its part of the transaction.
• Realized refers to the actual receipt of cash or claims to cash from the transaction.
• Recognized entails recording the transaction as revenue in the financial statements during the appropriate accounting period.

Therefore, the correct answer to when goods or services are exchanged for cash or claims to cash, revenues are: d. All of these answer choices are correct.