Based on the recognition principle, revenue is recorded on the financial statements when the:
I.payment is collected for the sale of a good or service.
II.earnings process is virtually complete.
III.value of a sale can be reliably determined.
IV.product is physically delivered to the buyer.
A)I and II only
B)I and IV only
C)II and III only
D)II and IV only
E)I and III only

Question

Quizplus · Accepted Answer

The recognition principle states that revenue should be recognized when it is earned and realizable, which typically means the earnings process is virtually complete (II) and the value of the sale can be reliably determined (III).

Based on the Recognition Principle, Revenue Is Recorded on the Financial