on december 15, 2025, a company receives an order from a customer for services to be performed on december…

on december 15, 2025, a company receives an order from a customer for services to be performed on december 28, 2025. due to a backlog of orders, the company does not perform the services until january 3, 2026. the customer pays for the services on january 6, 2026. the revenue principle requires the revenue to be recorded by the company on:\n\na. december 15, 2025.\nb. december 28, 2025.\nc. january 3, 2026.\nd. january 6, 2026.

on december 15, 2025, a company receives an order from a customer for services to be performed on december 28, 2025. due to a backlog of orders, the company does not perform the services until january 3, 2026. the customer pays for the services on january 6, 2026. the revenue principle requires the revenue to be recorded by the company on:\n\na. december 15, 2025.\nb. december 28, 2025.\nc. january 3, 2026.\nd. january 6, 2026.

Answer

Brief Explanations:

According to the revenue recognition principle in accounting, revenue is recognized when the performance obligation is satisfied. Here, the company performs the services on January 3, 2026. On December 15, 2025 (order received) and December 28, 2025 (scheduled service date but not performed), the performance obligation wasn't met. Payment on January 6, 2026 is not the trigger for revenue recognition; it's the service - performance (January 3, 2026) that matters.

Answer:

C. January 3, 2026