The Revenue Recognition Principle

question 37

Multiple Choice

The revenue recognition principle:

• A) Provides guidance on when a company must recognize revenue.
• B) Prescribes that a company record the expenses it incurred to generate the revenue reported.
• C) Prescribes that a company report the details behind financial statements that would impact users' decisions.
• D) Prescribes that accounting information is based on actual cost.
• E) Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

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Definitions:

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