Which of the following is not an example of the application of the revenue principle?
A) Recording the sale of merchandise on credit in sales revenue.
B) Recording accrued interest revenue on a loan made to another party.
C) Recording rent received in advance as rent revenue.
D) Recording the sale of merchandise for cash in sales revenue.

Question

Quizplus · Accepted Answer

The revenue principle states that revenue should be recognized when it is earned, regardless of when the cash is received. Rent received in advance is not yet earned, so it should be recorded as a liability (unearned revenue) until the period it covers has passed.

Which of the Following Is Not an Example of the Application