According to the revenue principle, revenue should be recorded:

Question

Quizplus · Accepted Answer

According to the revenue principle, revenue should be recorded when it has been earned. This means that the company has provided goods or services to the customer, and the customer has either paid for them or has an obligation to pay for them. Recording revenue before it has been earned (A) would violate this principle. Recording revenue when cash is received (B) may not accurately reflect when revenue has been earned, as there may be situations where cash is received before goods or services are provided. Recording revenue whenever the company needs to (D) would also violate the revenue principle, as it would not be based on when revenue has been earned.

According to the Revenue Principle, Revenue Should Be Recorded