Under the cash basis of accounting, a contractor records revenue when:
Explanation
On the cash method under IRC §446(c)(1), revenue is recorded when the money is actually or constructively received and expense when it is paid, so the ledger follows the bank. Mailing the invoice is the accrual trigger, because the revenue is earned at that point. Signing the contract creates an obligation but earns nothing yet. And recognising revenue at a stage of completion is the percentage-of-completion method used for long-term contracts, which is neither cash nor simple accrual.
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