The revenue recognition principle dictates that revenue should be recognized in the accounting records

Question

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The revenue recognition principle requires revenue to be recognized when the performance obligation is satisfied, meaning when goods or services are transferred to the customer and the customer has control over them. This may or may not coincide with the receipt of cash. Recognition of revenue at the end of the month or when income taxes are paid is not in accordance with the principle.

The Revenue Recognition Principle Dictates That Revenue Should Be Recognized