The Garrison Company offers terms of net 30 days for its credit sales.It records the revenue from these sales as soon as the sales are made rather than waiting until cash is received from the customers.This is an example of the
A) realization principle.
B) matching principle.
C) conservatism constraint.
D) consistency principle.

Question

Quizplus · Accepted Answer

The realization principle states that revenue should be recognized when it is earned or realized, regardless of when payment is received. In this case, the company recognizes the revenue at the time of the sale, even though payment may not be received for 30 days. This is in line with the realization principle.

The Garrison Company Offers Terms of Net 30 Days for Its