New Click Here to Play Diwali Spin and Win and Get Huge Discounts

    Register

    Question

    As per realization principle, revenue will be recognized:

    A When goods are dispatched Correct Answer Incorrect Answer
    B When advance payment received Correct Answer Incorrect Answer
    C When payment received for good delivered Correct Answer Incorrect Answer
    D When goods have been delivered Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    The realization principle states that revenue should be recognized or recorded when goods or services have been delivered to the customer and the company can reasonably expect to receive payment for those goods or services. In other words, revenue is recognized when there is an earning process completed, and there is a reasonable assurance of payment. Therefore, option c, "When goods have been delivered," is the correct answer as per the realization principle.

    Practice Next

    Relevant for Exams: