Does the receipt of cash indicate that revenue has been earned?

The receipt of cash does not necessarily indicate that revenue has been earned; it simply reflects a cash inflow. Revenue is recognized when it is earned, typically when goods or services have been delivered to the customer, regardless of when cash is received. This principle is part of the accrual accounting method, which distinguishes between cash transactions and revenue recognition. Therefore, cash receipts can precede or follow revenue recognition depending on the terms of the sale.