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Revenue Recognition & R2R1 / 3

2 min lesson

Build vs. buy

Explain your answer to "Why can't the general ledger simply hold the revenue-recognition detail and skip the subledger layer?" Add one concrete detail from the lesson.

Step 1 of 3

Build vs. buythe judgment they're testing

This role explicitly tests when to write code versus configure a platform. Native rev-rec inside a billing tool is enough for some businesses and a liability for others.

Native billing rev-rec suffices when

Contracts are simple - single obligation, ratable subscription.

Few modifications, no multi-element bundles.

Audit scope is light and volume is modest.

You want speed over control and can live with the tool's model.

You need a dedicated subledger when

Multi-element arrangements need real SSP allocation.

Modifications, co-terming and true-ups are frequent.

Usage and subscription mix on the same contract.

SOXSarbanes-Oxley Act. A US law that forces companies to keep auditable controls over any system that affects their financial reporting. Press Enter for the full definition.-grade audit trails and segregation of duties are required.

Greenfield doesn't mean over-build

As Cursor's first finance systems hire on a greenfield stack, the instinct to architect a perfect subledger on day one is the wrong one. The honest answer is staged: start where native rev-rec covers the contracts you actually sign today, instrument the tie-out reconciliation early and pull the dedicated subledger in when contract complexity - not headcount - demands it.

Interview move

Draw the three layers and put the hard logic in the middle one explicitly. Say the subledger keeps contract-level detail and posts summarized entries to the GL, then name your build-vs-buy trigger as contract complexity rather than revenue scale. That distinction - complexity, not size - is what a staff-level answer sounds like.