When does the receipt of cash occur concerning earned revenue?

In recognizing revenue, the receipt of cash is significant because it helps determine when the revenue is recognized in the financial statements. The concept of revenue recognition suggests that income can only be recorded when it is earned, regardless of when cash is received. This means that earned revenue is recognized when the goods or services are delivered or performed, which might not coincide with receiving cash.

In this context, saying that cash is received after the revenue is earned suggests a transaction where services have been provided or goods delivered, but payment has not yet been made until a later time. In accounting terms, this generates a receivable, meaning that even though the cash has not yet been received, the revenue can still be recognized because it has been earned through the delivery of goods or services.

It is important to note that the other options imply cash is received either before or at the same time as the revenue is recognized, which does not account for scenarios where the cash receipt can happen after the revenue has already been acknowledged in the financial records. This emphasizes the distinction between cash flow and revenue recognition, which is a fundamental principle in accrual accounting.