The realization principle indicates that revenueshould be recorded in the accounting records:when cash is collected from customerswhen goods are sold or services are provided to customersat the end of the accounting periodonly when the revenue can be matched by an equal dollar amount of expenses

The realization principle of accounting helps accountants understand when they can recognize and…

Answered: The realization principle indicates…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter5: Income Statement: Reporting The Results Of Operating Activities

Section: Chapter Questions

Problem 6Q

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Similar questions

Revenues and expenses must be recorded in the accounting period in which they were earned or incurred, no matter when cash receipts or outlays occur under which of the following accounting methods? A. accrual basis accounting B. cash basis accounting C. tax basis accounting D. revenue basis accounting
In the revenue cycle, the most significant accounts typically include revenue and accounts receivable. (T/F)
Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. Accrual-basis accounting records both cash and noncash transactions when they occur. Generally accepted accounting principles require companies to use cash-basis accounting. The key elements of accrual-basis accounting are the revenue recognition principle, the expense recognition principle, and the historical cost principle.
Identify whether each of the following transactions, which are related to revenue recognition, are accrual, deferral, or neither. A. sold goods to customers on credit B. collected cash from customer accounts C. sold goods to customers for cash D. collected cash in advance for goods to be delivered later
The cash received in advance before delivering a product or performing a service is called unearned revenue.
Which of the following is not a criterion to recognize revenue under GAAP? A. The earnings process must be completed. B. A product or service must be provided. C. Cash must be collected. D. GAAP requires that the accrual basis accounting principle be used in the revenue recognition process.
A contract between one or more parties creates: a. the date that cash is paid by the customer b. enforceable rights and obligations for the parties c. revenue for recognition d. the fixed amount of payments for the good or service
The revenue recognition principle states that all types of incomes should be recorded or recognized when: Cash is received At the end of the accounting period When they are earned When the interest is paid
When converting from cash basis to accrual basis accounting, which of the following adjustments should be made to cash receipts from customers to determine accrual basis service revenue. a. Subtract ending accounts receivable. b. Subtract beginning unearned service revenue. c. Add ending accounts receivable. d. Add cash sales.
Identify whether each of the following transactions, which are related to revenue recognition, are accrual, deferral, or neither. sold goods to customers on credit collected cash from customer accounts sold goods to customers for cash collected cash in advance for goods to be delivered later
Under accrual accounting, when should expenses be matched against revenue? after cash is collected from the customer in the same period as the revenue they helped generate before the earnings process is complete after payment for any costs related to the revenue
Identify whether each of the following transactions, which are related to revenue recognition, are accrual, deferral, or neither. a. sold goods to customers on credit b. collected cash from customer accounts c. sold goods to customers for cash d. collected cash in advance for goods to be delivered later

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