The revenue principle says to record revenue when it has bee

The revenue principle says to record revenue when it has been ___ ( A. collected B. earned C. recorded) regardless of when____ (A. cash is collected B. revenue is earned C. sold inventory is delivered) Therefore, the amount of revenue reported is what company____ ( A. collected B. earned C. paid)

Solution

The revenue principle says to record revenue when it has been “earned “ regardless of when “cash is collected “. Therefore, the amount of revenue reported is what company “earned “

- The revenue principle states that revenue should be recorded by the enterprises when it is realizable and when it has been earned. The companies shouldn’t wait for the collection of revenue.

- The Company or an enterprise should record the revenue when the business earned the revenue.

- As per the Accrual basis of system of accounting, revenue should be recorded immediately even though which is not being received.