Criteria for Revenue Recognition We generally treat revenue as earned when the company delivers merchandise to the customer. At that moment, what additional uncertainty remains about the proper amount of revenue that will ultimately be realized? 6:33 Revenue Recognition and Evaluation of Sales Staff Revenue on an accrual-accounting basis must be both earned and realized before it is recognized in the income statement. Revenue in cash-basis accounting must be received in cash. Is accrual-basis or cash-basis recognition of revenue more relevant for evaluating the performance of a sales staff? Why? Exercises