When is the $1,250 considered to be recognized?

Explanation:

According to the Generally Accepted Accounting Principles (GAAP) and the revenue recognition principle, revenue is recognized when it is earned and realized or realizable. In this scenario, the sale was made on April 30 when the transaction occurred. The issuance of the statement on May 5 and the receipt of the check on May 10 are subsequent events related to the collection of the revenue but do not impact the recognition of revenue. The revenue is considered earned and recognized on the date of the sale, which is April 30. This aligns with the fundamental accounting principle of recognizing revenue when it is earned.

It is important for companies to follow the revenue recognition principle to ensure accurate and consistent financial reporting. By recognizing revenue when it is earned, companies can provide stakeholders with a clear picture of their financial performance and position. This practice also helps prevent manipulation or misrepresentation of financial information.

For further understanding and insights into revenue recognition principles, you can explore more resources on accounting standards and practices. Understanding the fundamentals of revenue recognition is essential for businesses to maintain transparency and integrity in their financial reporting.