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Question 52 The revenue recognition principle requires that: A. revenue be recognized only after cash payment...

Question 52

The revenue recognition principle requires that:

A. revenue be recognized only after cash payment has been received

B. only the amount of revenue for which cash will be received in the current fiscal year be recognized in the current year

C. allows considerable latitude in the timing of revenue recognition

D. revenue be recognized in the period when the firm becomes entitled to payment for goods or services delivered

BAM313 - INTRODUCTION TO FINANCIAL MANAGEMENT

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Option D. revenue be recognized in the period when the firm becomes entitled to payment for goods or services delivered. The Revenue recognition principle dictates that revenue be recognised in the accounting period in which it is earned. Revenue is considered earned when the service has been provided or when the goods are delivered. The revenue recognition principle requires that revenue must be recorded at the time the duties are performed, regardless of when the cash is received.

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