The revenue recognition principle dictates that revenue should be recognized in the accounting period in which it is
A) collected.
B) earned.
C) earned and collected.
D) most likely to be collected.

Question

Quizplus · Accepted Answer

The revenue recognition principle states that revenue should be recognized when it is earned, regardless of whether it has been collected or not. Therefore, option B is correct. Option A and D are incorrect because revenue can be recognized before it is collected, and option C is incorrect because revenue should be recognized when it is earned, not just when it is both earned and collected.

The Revenue Recognition Principle Dictates That Revenue Should Be Recognized