The realization principle indicates that revenue usually should be recognized and recorded in the accounting records:
A)When goods are sold or services are rendered to customers.
B)When cash is collected from customers.
C)At the end of the accounting period.
D)Only when the revenue can be matched by an equal dollar amount of expenses.

Question

Quizplus · Accepted Answer

The realization principle states that revenue should be recognized and recorded in the accounting records when goods are sold or services are rendered to customers. This means that revenue should be recognized at the point of sale, regardless of whether the payment has been received or not.

The Realization Principle Indicates That Revenue Usually Should Be Recognized