German companies follow the principle of "realization of profits" which means that profits are only recognized when the project is completely finished, and they have received payment for the same. This is mainly to prevent any overestimation of profits and to ensure accurate financial reporting. Therefore, option A is the best choice.

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German Companies

Question 59

Multiple Choice

German companies

A) do not recognize the profit until the project is completely finished and they have been paid.
B) recognize profits before the project is finished.
C) recognize profits when the project is initialized.
D) do not recognize the profits until they have been formally audited.
E) do not have profits,but instead report dividends.

Correct Answer: