Recognizing Revenue with the Point of Sale Method
Without a sale a company would not generate revenue, and for many businesses the sale itself is the most important part of the entire earning process. It is for this reason that most companies use the point of sale as the point of revenue recognition. As a rule of thumb, a sale takes place when one or more of the following events takes place:
Ownership of goods is transferred to a buyer
Services are performed
Asset services (such as apartment rentals) have been provided
Revenue recognition at the point of sale is the most intuitive method, and can be the least complicated of the possible methods of recognizing revenue. A sale has been made and cash is received; the revenue is recognized immediately ...
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