The Garrison Company offers terms of net 30 days for its credit sales. It records the revenue from these sales as soon as the sales are made rather than waiting until cash is received from the customers. This is an example of the

Question

Quizplus · Accepted Answer

The realization principle, also known as the revenue recognition principle, states that revenue should be recognized when it is earned, regardless of when payment is received. In this case, Garrison Company records revenue as soon as the sales are made, even if payment is not received until 30 days later. Therefore, this is an example of applying the realization principle.

The Garrison Company Offers Terms of Net 30 Days for Its