The revenue recognition principle dictates that revenue be recognized in the accounting period
A) before it is earned.
B) after it is earned.
C) in which it is earned.
D) in which it is collected.

Question

Quizplus · Accepted Answer

The revenue recognition principle requires that revenue be recognized in the accounting period in which it is earned. This means that revenue should be recognized when the service is performed or the sale is made, not when payment is collected or a contract is signed. Recognizing revenue in the correct period is important for accurately reflecting a company's financial performance and for providing reliable financial information to stakeholders.

The Revenue Recognition Principle Dictates That Revenue Be Recognized in the Accounting