The question of when revenue should be recognized on the income statement (according to GAAP) is addressed by the:
A) Revenue recognition principle.
B) Going-concern assumption.
C) Objectivity principle.
D) Business entity assumption.
E) Cost principle.

Question

Quizplus · Accepted Answer

The revenue recognition principle governs when and how revenue should be recognized on the income statement according to GAAP. This principle states that revenue should be recognized when it is earned and measurable, and when collection is reasonably assured.

The Question of When Revenue Should Be Recognized on the Income