The revenue recognition principle is a requirement under accrual accounting to record revenues when
A)they are earned,not necessarily when cash is received.
B)the cash is received,not necessarily when they are earned.
C)they can be matched to expenses.
D)None of the choices are correct.

Question

Quizplus · Accepted Answer

The revenue recognition principle requires revenues to be recorded when they are earned, not necessarily when cash is received. This means that even if a company has not yet received payment for a product or service, they would still record the revenue for that transaction if it has been earned. This allows for a more accurate representation of a company's financial performance.

The Revenue Recognition Principle Is a Requirement Under Accrual Accounting