when should revenue be recognised ? are there exceptions to the general rule ?
Answers
Answer:
Explanation:
Are there exceptions to the general rule? Revenue should be recognised when sales take place either in cash or credit and/or right to receive income from any source is established. Revenue is not recognised, in case, if the income or payment is received in advance or the payment is actually received from the debtors.
Answer:
Revenue should be recognized when sales take place either in cash or credit and/or the right to receive income from any source is established. Similarly, rent for the month of March even if received in April month will be treated as revenue for the financial year ending 31st March.
There are two exceptions to this rule:
- In the case of sales on an installment basis, only the amount collected in installments is treated as revenue.
- In the case of long-term construction contracts, a proportionate amount of revenue, based on part of the contract completed by the end of the financial year is treated as realized.
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When should revenue be recognised? Are there exceptions to the general rule?
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Revenue is recognized when sale is made or services are
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