The Garrison Company offers terms of net 30 days for its credit sales, recording the revenue from the sales when the cash is received from the customers. Garrison Company is
A)following the conservatism constraint.
B)violating the revenue recognition principle.
C)violating the consistency principle.
D)following the realization principle.

Question

Quizplus · Accepted Answer

Garrison Company is violating the revenue recognition principle because it records revenue when cash is received rather than when the goods or services are delivered, which is when revenue should be recognized according to this principle.

The Garrison Company Offers Terms of Net 30 Days for Its