Which of the following is NOT a GAAP revenue recognition criterion?

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Multiple Choice

Which of the following is NOT a GAAP revenue recognition criterion?

Explanation:
GAAP revenue recognition relies on earning revenue by meeting specific conditions: there must be persuasive evidence of an arrangement, delivery of goods or performance of services, the price must be fixed or determinable, and collectability must be reasonably assured. A signed contract is not required by GAAP as a criterion. An arrangement can be evidenced by a purchase order, an invoice, or other documentation that shows the agreement exists. Therefore, revenue can be recognized when the other criteria are met even if there isn't a signed contract. This is why the statement about the customer signing a contract is not a GAAP criterion.

GAAP revenue recognition relies on earning revenue by meeting specific conditions: there must be persuasive evidence of an arrangement, delivery of goods or performance of services, the price must be fixed or determinable, and collectability must be reasonably assured. A signed contract is not required by GAAP as a criterion. An arrangement can be evidenced by a purchase order, an invoice, or other documentation that shows the agreement exists. Therefore, revenue can be recognized when the other criteria are met even if there isn't a signed contract. This is why the statement about the customer signing a contract is not a GAAP criterion.

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