The revenue recognition principle provides that revenue is recognized when
A) it is realized.
B) it is realizable.
C) it is realized or realizable and it is earned.
D) None of these answers are correct.

Question

Quizplus · Accepted Answer

The revenue recognition principle provides that revenue is recognized when it is realized or realizable and it is earned. This means that revenue can be recognized when a company has either received payment for goods or services or has an assurance of payment, and the goods or services have been delivered or completed. Therefore, choice C is the best answer as it accurately reflects the conditions under which revenue is recognized.

The Revenue Recognition Principle Provides That Revenue Is Recognized When