The revenue recognition principle does not pertain to long-term contracts, franchises, commodities, and installment sales.

Question

Quizplus · Accepted Answer

The revenue recognition principle applies to all types of sales transactions, including long-term contracts, franchises, commodities, and installment sales. It requires revenue to be recognized when earned and realized or realizable, regardless of the type of transaction.

The Revenue Recognition Principle Does Not Pertain to Long-Term Contracts