The principle that (1)requires revenue to be recognized at the time it is earned, (2)allows the inflow of assets associated with revenue to be in a form other than cash and (3)measures the amount of revenue as the cash plus the cash equivalent value of any non-cash assets received from customers in exchange for goods or services is called the:
A)Going-concern principle
B)Cost principle
C)Revenue recognition principle
D)Objectivity principle
E)Business entity principle

Question

Quizplus · Accepted Answer

The revenue recognition principle states that revenue should be recognized when it is earned, regardless of when cash is received. It also allows for revenue to be recognized when assets other than cash are received in exchange for goods or services. This principle is a fundamental concept in accounting and is critical to accurately reflecting a company's financial performance.

The Principle That (1)requires Revenue to Be Recognized at the Time