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.

Question

Quizplus · Accepted Answer

German companies follow a conservative accounting principle called the "realization principle" which states that revenue can only be recognized when it is earned and realized, meaning the project is completed, and payment has been received. Therefore, German companies do not recognize profit until the project is completely finished and they have been paid.

German Companies