Revenue is recognized when it is:
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A. B. C. D.A
The correct answer is A. Realized and Earned.
Revenue recognition is the process of accounting for and reporting revenue generated by a company. Revenue is recognized when it is earned and realized. Revenue is earned when the seller has performed its obligations under a sales contract, typically when goods are delivered or services are provided. Revenue is realized when the seller has collected cash or has a right to receive cash from the buyer in exchange for the goods or services provided.
Fictitious revenue is revenue that is recorded but not actually earned or realized. This can occur when a company fraudulently inflates its revenue by recording sales that never occurred or by recording revenue before goods have been shipped or services have been provided. Fictitious revenue is a form of financial statement fraud.
Evidenced revenue is revenue that is supported by documentation such as sales contracts, purchase orders, and invoices. While evidence of revenue is important to support the recognition of revenue, it is not sufficient on its own. Revenue must still be earned and realized to be recognized.
Therefore, the correct answer is A. Realized and Earned. Revenue must be both earned and realized to be recognized in the financial statements. Fictitious revenue and evidenced revenue are not sufficient on their own to recognize revenue.