Question

The revenue recognition principle says Question 2 options: A) divide time into annual periods to measure revenue properly. B) record revenue only after you have earned it. C) measure revenues and expenses in order to compute net income. D) record revenue after you receive cash.

Answer 1

Answer:

The correct answer is letter "B": record revenue only after you have earned it.

Explanation:

Revenue Recognition is an accounting term that describes how and when a company reports revenue in its ledger. It is also part of the Generally Accepted Accounting Principles (GAAP). Using the accrual accounting method, revenue must be recorded when it is earned not when the company collects the cash proceeding.