iii) The revenue is assumed to be realised when legal right to receive it arises and receipt of cash is irrelevant. identify the accounting concept.
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Answer:
matching concept
bcz According to the matching accounting concept, revenue is only recognized when it is realized. Now revenue is the cash inflow for a business arising from the sale of goods or services. And we assume this revenue as realized only when it legally arises to be received.
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Answer: REVENUE RECOGNITION CONCEPT.
Explanation:
REVENUE RECOGNITION CONCEPT RECOGNISE REVENUE IN THE PERIOD IN WHICH THAT IS EARNED IRRESPECTIVE OF THE FACT WHETHER IT IS RECEIVED OR NOT DURING THE PERIOD.
REVENUES RESUMED TO BE REALISED WHEN A LEGAL RIGHT TO RECEIVE IT ARISES i.e. at the point of time when goods have been sold or services has been rendered.
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