The question of when revenue should be recognized on the income statement according to GAAP is addressed by the:
A) Business entity assumption.
B) Objectivity principle.
C) Going-concern assumption.
D) Revenue recognition principle.
E) Measurement (Cost) principle.

Question

Quizplus · Accepted Answer

The question of when revenue should be recognized on the income statement is addressed by the revenue recognition principle, which states that revenue should be recognized when it is earned and realizable. This principle is an important part of GAAP and helps ensure that companies report their financial information accurately and consistently.

The Question of When Revenue Should Be Recognized on the Income