Revenue Recognition under GAAP

In the realm of financial reporting, the Generally Accepted Accounting Principles (GAAP) provide a framework designed to ensure consistency and transparency in financial statements. One of the core principles of GAAP addresses the recognition of revenue.

Consider a company that sells various products, including physical goods and digital subscriptions. This company recognizes revenue upon delivery of physical goods to customers and upon the activation of digital subscriptions. Based on the GAAP framework, which of the following statements best reflects the principle of revenue recognition this company is adhering to?