Sales Recognition

Sales recognition is the accounting process of recording when a sale is considered complete and revenue is officially acknowledged in financial statements. Generally, a sale is recognized when the goods or services are delivered to the customer, and the payment is assured. This ensures that a company's financial performance accurately reflects its activities during a specific period. Proper sales recognition is crucial for businesses to report their earnings correctly and to maintain transparency for investors and stakeholders, allowing for a clearer understanding of the company's financial health.