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11 March, 09:33

The revenue recognition principle states that:

a. Revenue is a component of common stock.

b. Revenue should be recognized in the balance sheet.

c. Revenue should be recognized in the period the cash is received.

d. Revenue should be recognized in the period goods and services are provided.

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  1. 11 March, 10:09
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    The correct answer is letter "D": Revenue should be recognized in the period goods and services are provided.

    Explanation:

    Revenue Recognition is an accounting term that describes how and when a firm records revenue in its books of accounting. Revenue recognition follows the Generally Accepted Accounting Principle (GAAP) and using the accrual method of accounting it requests to record revenue when earned, it is when the goods or services are provided regardless of when the money for those products is received.
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