Companies should recognize revenue when it is realized and when cash is received.

Name: Companies should recognize revenue when it is realized and when cash is received.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Companies should recognize revenue when it is earned, not necessarily when cash is received. This is the concept of accrual accounting. Cash basis accounting recognizes revenue only when cash is received, but this method is not in compliance with Generally Accepted Accounting Principles (GAAP).

Companies Should Recognize Revenue When It Is Realized and When