The revenue recognition principle dictates that revenue should be recognized in the accounting records
A) when cash is received.
B) when it is earned.
C) at the end of the month.
D) in the period that income taxes are paid.

Question

Quizplus · Accepted Answer

The revenue recognition principle states that revenue should be recognized when it is earned, which means when goods or services are delivered to the customer and the transaction is complete. It is not tied to when cash is received or when taxes are paid. Monthly intervals have no relevance either.

The Revenue Recognition Principle Dictates That Revenue Should Be Recognized