According to the revenue recognition principle, companies are required to record revenue when cash is received as this provides the most objective evidence for the auditors.

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The revenue recognition principle requires companies to record revenue when it is earned and realizable, not necessarily when cash is received. This principle is part of accrual accounting and ensures that revenue is matched with the expenses incurred to generate that revenue, providing a more accurate picture of a company's financial performance.

According to the Revenue Recognition Principle, Companies Are Required to Record