According to the realization principle, revenue from a sale of a firm's products are recognized:
A) when the products are shipped to the buyer.
B) when the buyer orders the goods.
C) when cash is realized from the sale of the products.
D) at the time of the sale whether or not cash is actually received.

Question

Quizplus · Accepted Answer

The realization principle states that revenue from the sale of a firm's product should be recognized at the time of the sale, regardless of whether or not cash is actually received at that time. This is because the sale is considered complete when the buyer agrees to make the purchase, so the revenue can be recognized even if payment is delayed or not guaranteed. Choices A, B, and C are incorrect because they do not reflect the principles of the realization principle.

According to the Realization Principle, Revenue from a Sale of a Firm's