According to the realization principle, revenue from a sale of the firm's products are recognized

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The realization principle states that revenue should be recognized at the time of sale, which is when the ownership of goods and title have been transferred to the buyer, and the seller has received the right to payment. This typically occurs at the time the goods are shipped to the buyer, although in some cases it may be when the goods are delivered or when the buyer accepts the goods. It is not based on when the buyer orders the goods or when cash is received, as these events do not necessarily indicate that a sale has occurred.

According to the Realization Principle, Revenue from a Sale of the Firm's