How many of the following statements regarding the revenue recognition and matching principles are true?
According to the revenue principle, a company should not record the revenue from a transaction until it is actually received in cash.
To ensure revenue reporting is consistent over time, a business adopts a revenue recognition policy that defines the time at which they report revenues from providing goods or services to customers.
The matching principle requires that expenses be determined first and then revenues be "matched" to those expenses.
A) None
B) One
C) Two
D) Three

Question

Quizplus · Accepted Answer

The second statement is true. The revenue recognition principle requires that revenue be recognized when it is earned, not necessarily when cash is received. The matching principle requires that expenses be matched to the revenues they help generate, not the other way around.

How Many of the Following Statements Regarding the Revenue Recognition