Which of the following is not a proper application of the revenue recognition principle?
A)Recording the sale of merchandise on credit as sales revenue.
B)Recording rent received in advance as unearned rent revenue.
C)Recording interest revenue when cash is collected rather than when earned.
D)Reducing the unearned service revenue account for service revenue performed at the end of the accounting period.

Question

Quizplus · Accepted Answer

Recording interest revenue when cash is collected rather than when earned is not in accordance with the revenue recognition principle. Revenue should be recognized when it is earned, not when cash is collected.

Which of the Following Is Not a Proper Application of the Revenue