When should a sole trader recognize revenue according to accounting standards?

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Question: When should a sole trader recognize revenue according to accounting standards?

Options:

Correct Answer: When the service is performed

Solution:

Revenue should be recognized when the service is performed or goods are delivered, according to the accrual basis of accounting.

When should a sole trader recognize revenue according to accounting standards?

When should a sole trader recognize revenue according to accounting standards?

Step 1: Understand that a sole trader is a type of business owned by one person.
Step 2: Learn about revenue, which is the money earned from selling goods or services.
Step 3: Know that accounting standards guide when to record revenue.
Step 4: Recognize that revenue should be recorded when the service is performed or the goods are delivered.
Step 5: Remember that this is based on the accrual basis of accounting, which means recording revenue when it is earned, not when the money is received.

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