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 anynoncash assets received from customers in exchange for goods or services is called the:
A)Revenue recognition principle.
B)Business entity principle.
C)Cost principle.
D)Going concern principle.
E)Monetary unit principle.

Question

Quizplus · Accepted Answer

The rule described is the Revenue recognition principle, which is a fundamental accounting principle. It specifies that revenue should be recognized when it is earned (even if cash is received later) and should reflect the value of any non-cash assets received in exchange for goods or services.

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