The Realization Principle Indicates That Revenue Usually Should Be Recognized

question 59

Multiple Choice

The realization principle indicates that revenue usually should be recognized and recorded in the accounting records:

• A)When goods are sold or services are rendered to customers.
• B)When cash is collected from customers.
• C)At the end of the accounting period.
• D)Only when the revenue can be matched by an equal dollar amount of expenses.

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Definitions:

Holder

An individual or entity that legally possesses a negotiable instrument, such as a check or a bond, and has the right to collect the value of the instrument.

Payable

Describes an amount of money that is owed and should be paid, often within a specified period.

Bearer

Refers to an individual or entity in possession of a negotiable instrument, such as a check or bond, that is payable to whoever holds it.

Payable

Due for payment; a financial obligation that one party has to pay to another.