When a business records revenue before it has been earned, it has violated the measurement issue of
A) recognition.
B) evaluation.
C) classification.
D) valuation.

Question

Quizplus · Accepted Answer

The measurement issue of recognition involves determining when revenue and expenses should be recorded. If a business records revenue before it has been earned, it has recognized the revenue prematurely, which violates the recognition principle of accounting. This can lead to misleading financial statements and misrepresentation of the company's financial position.

When a Business Records Revenue Before It Has Been Earned