Question

Explain the revenue principle.

Answer 1

Answer:

the revenue recognition principles is a cornerstone of accrual account together with the matching principles.

Answer 2

The Revenue Principle states that revenue should be recognised when the goods are delivered by sellers and accepted by buyer that is ownership of goods changes. Hence the revenue is assumed to be realised when a legal right to recieve it arises. Credit sales are treated as revenue on the day sales are made and not when money is recieved from the buyer.

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