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solmaris [256]
1 year ago
9

What criteria must normally be met for revenue to be recognized under accrual basis accounting?

Business
1 answer:
Nezavi [6.7K]1 year ago
4 0

The accrual accounting characteristic known as the revenue recognition principle states that revenues must be the  recorded on the income statement in the period in which they are realized and earned, not necessarily in the period in which cash is received.

The earned revenue represents the money that has been spent on goods or services that have been rendered. For the revenue-generating activity to be included in the revenue for the relevant accounting period, it must be finished or almost the finished. The matching principle also mandates that revenue and related costs must be reported in the same accounting period.

To learn more about accounting, click here.

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The Wet Dog Surf Company borrows $27,000 at 5.00% for 10 months. Calculate the total interest amount (rounded to the nearest pen
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