1. Which of the following revenue recognition statements is most likely to be GAAP compliant?

a. MeKong, Inc. recognizes revenue as customers obtain control of promised goods and services by an amount that reflects consideration expected in exchange for goods or services. Generally, the delivery of electricity and/or natural gas results in the transfer of control to customers at the time the commodity is delivered and the amount of revenue recognized is equal to the amount billed to each customer, including estimated volumes delivered when billings have not yet occurred.

b. MeKong, Inc. recognizes revenue as customers pay for promised goods and services in an amount that reflects consideration expected in exchange for those goods or services. Generally, the delivery of electricity and natural gas results in the transfer of control to customers at the time the commodity is delivered and the amount of revenue recognized is equal to the amount of payment received from each customer, including estimated volumes delivered when payments have not yet occurred.

c. Mekong, Inc. recognizes revenue as customers consume promised goods and services in an amount that reflects consideration expected in exchange for those goods or services. Generally, the delivery of electricity and natural gas results in the transfer of control to customers at the time the commodity is delivered and the amount of revenue recognized is equal to the amount consumed by each customer, including estimated volumes delivered when billings have not yet occurred.