The revenue recognition principle dictates that revenue should be recognized in the accounting records
A) when cash is received.
B) when the performance obligation is satisfied.
C) at the end of the month.
D) in the period that income taxes are paid.

Question

Quizplus · Accepted Answer

According to the revenue recognition principle, revenue should be recognized in the accounting records when the performance obligation is satisfied. This means that revenue should be recognized when the goods or services have been delivered or rendered, and the customer has accepted them. Cash receipt may or may not coincide with the recognition of revenue.

The Revenue Recognition Principle Dictates That Revenue Should Be Recognized