The revenue recognition principle requires that revenue be recognized in the accounting records ________.
A)when cash is received
B)when it is earned
C)at the end of the accounting period
D)in the period the income taxes are paid

Question

Quizplus · Accepted Answer

The revenue recognition principle requires that revenue be recognized when it is earned, which means when a company has delivered goods or services to a customer and the customer is obligated to pay for them. It does not depend on when cash is received or when income taxes are paid, and it does not occur only at the end of the accounting period.

The Revenue Recognition Principle Requires That Revenue Be Recognized in the Accounting