Most businesses follow the general rule that revenue is recognized when earned, not necessarily when the cash is received.

Name: Most businesses follow the general rule that revenue is recognized when earned, not necessarily when the cash is received.
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Quizplus · Accepted Answer

This is called the accrual basis of accounting, where revenue is recognized when it is earned, regardless of when the cash is received. This method is used to match revenues with expenses in the appropriate accounting period.

Most Businesses Follow the General Rule That Revenue Is Recognized