The realization principle states that revenue should be recognised:

Question

Quizplus · Accepted Answer

The realization principle states that revenue should be recognized when the earning process is substantially complete and the receipt of money is reasonably certain. Choice A is too strict as it requires the receipt of money to be received before recognizing revenue. Choice B is more reasonable but may not be practical in cases where there is uncertainty about the receipt of money. Choice C is too vague as it does not specify what constitutes "most" of the money due. Therefore, choice D is the best option as it strikes a balance between completion of the earning process and certainty of receiving money.

The Realization Principle States That Revenue Should Be Recognised