The revenue recognition principle does not pertain to situations where revenue is recognized over time such as long-term contracts,franchises,commodities,and installment sales.

Question

Quizplus · Accepted Answer

The revenue recognition principle does pertain to situations where revenue is recognized over time, such as long-term contracts, franchises, commodities, and installment sales. In these cases, revenue is recognized gradually over the course of the contract or sales period, rather than all at once. The principle requires that revenue be recognized when it is earned, regardless of when payment is received.

The Revenue Recognition Principle Does Not Pertain to Situations Where