As a general rule, revenues should not be recognized in the accounting records when earned, but rather when cash is received.

Question

Quizplus · Accepted Answer

The statement is false. According to the revenue recognition principle, revenues should be recognized when earned, regardless of when cash is received. This means that if a company has earned revenue but has not yet received payment, the revenue should still be recorded in the accounting records.

As a General Rule, Revenues Should Not Be Recognized in the Accounting