What is mean by realization concept
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Realization concept in accounting, also known as revenue recognition principle, refers to the application of accruals concept towards the recognition of revenue (income).
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The realization concept is a principle, where the revenue of the corporation can be identified when the goods and services with respect to the revenue are delivered.
This way, the revenue collected from the corporation is recognised once it has been earned. For instance, a customer pays 1000 INR as advance payment for a craft.
This amount is considered as a liability untill the craft is completed and delivered. This is called as realization concept.
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