What could be two reasons why revenue recognition in QBO Advanced isn’t working for a particular product or service?

1. The user doesn’t have permission to use the revenue recognition feature.
2. The account selected for revenue recognition is an expense account.
3. The revenue recognition setting is turned off.

Question

31-01-2025
Business

College

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What could be two reasons why revenue recognition in QBO Advanced isn’t working for a particular product or service?

1. The user doesn’t have permission to use the revenue recognition feature.
2. The account selected for revenue recognition is an expense account.
3. The revenue recognition setting is turned off.

Answer :

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Jamessmith76 Jamessmith76 · Answer 1 · 2025-01-25T01:38:17-05:00

Final answer:

Two potential reasons for revenue recognition issues in QBO Advanced may be that the user lacks the necessary permissions, or the revenue recognition feature is disabled. Proper revenue recognition aligns with GAAP, considering the availability of revenue within the fiscal period and the matching principle for expenses.

Explanation:

Two reasons why revenue recognition in QuickBooks Online (QBO) Advanced isn't working for a particular product or service could be:

The user does not have permission to use the revenue recognition feature.
The revenue recognition setting is turned off.

It is important to note that revenue recognition should align with Generally Accepted Accounting Principles (GAAP), focusing on when revenue is measurable and available to cover costs within the fiscal period. This is especially crucial in governmental accounting. Also, when expenses are incurred to deliver a service, the matching principle of GAAP indicates that the expense recognition should coincide with the revenue recognition to reflect the true cost of the service rendered.