Recognizing revenue when it is earned and not when cash is received and recognizing expenses when the related goods or services are used rather than when they are paid for is called:
A)Revenue recognition.
B)Accrual accounting.
C)Conservatism.
D)Matching.

Question

Quizplus · Accepted Answer

The given description matches the principles of accrual accounting, where revenue is recognized when earned, and expenses are recognized when incurred, regardless of when cash transactions take place. The other options, such as conservatism and matching, are related accounting concepts, but do not fully align with the given explanation.

Recognizing Revenue When It Is Earned and Not When Cash