The question of when revenue should be recognized on the income statement (according to GAAP) is answered by the
A) revenue recognition principle
B) going concern principle
C) currency principle
D) business entity principle
E) historical cost principle

Question

Quizplus · Accepted Answer

The revenue recognition principle provides guidance on when revenue should be recognized on the income statement according to GAAP. It requires companies to recognize revenue when it is earned and realized or realizable, and when the company has substantially completed its obligations to the customer.

The Question of When Revenue Should Be Recognized on the Income