The rule that (1)requires revenue to be recognized at the time it is earned, (2)allows the inflow of assets associated with revenue to be in a form other than cash,and (3)measures the amount of revenue as the cash plus the cash equivalent value of any noncash assets received from customers in exchange for goods or services,is called the:

Question

Quizplus · Accepted Answer

The rule described in the question is the revenue recognition principle. It outlines when revenue should be recognized and how it should be measured, including allowing for non-cash assets received in exchange for goods or services. Option A refers to the assumption that a business will continue operating into the future. Option B refers to the principle of valuing assets at cost. Option D refers to the requirement for financial information to be unbiased and not influenced by personal biases. Option E refers to the assumption that a business's financial information should be separate from the personal finances of its owners or employees.

The Rule That (1)requires Revenue to Be Recognized at the Time