Which statement correctly describes when revenue for a one-year Tri-Net subscription is recognized?

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Multiple Choice

Which statement correctly describes when revenue for a one-year Tri-Net subscription is recognized?

Revenue for a subscription that spans a year is recognized over time as the service is delivered. For a one-year Tri-Net subscription, the customer gets access to the service each month, so the entity satisfies a portion of its performance obligation every month and records revenue accordingly. Cash receipt timing does not set revenue; revenue is recognized when control of the service is transferred. If cash is collected upfront, it creates a liability (deferred revenue) until the service is actually provided. When the service is delivered evenly over the year, recognizing revenue monthly best matches the transfer of benefits to the customer.

Revenue for a subscription that spans a year is recognized over time as the service is delivered. For a one-year Tri-Net subscription, the customer gets access to the service each month, so the entity satisfies a portion of its performance obligation every month and records revenue accordingly. Cash receipt timing does not set revenue; revenue is recognized when control of the service is transferred. If cash is collected upfront, it creates a liability (deferred revenue) until the service is actually provided. When the service is delivered evenly over the year, recognizing revenue monthly best matches the transfer of benefits to the customer.

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