According to the Realization concept, revenues should only be recognized when:
1) The economic value of the product can be identified.
2) The related revenue (Price) and Cost can be identified.
3) The most critical event has taken place. (This differs from firm to firm but usually once a good has been delivered to it's customer even though he might not have paid for the good, it is considered to be sold and revenue is realized/ recognized)
The revenue recognition principle dictates that revenue should be recognized in the accounting records when it is earned.
Revenue is properly recognized:
the revenue recognition principle dictates that revenue should be recognized in the accounting records?
credit to unearned revenue
Revenue is recognized when it is incurred in accrual accounting while in cash based accounting revenue is recognized when actual cash is paid
The revenue recognition principle dictates that revenue should be recognized in the accounting records when it is earned.
Revenue is properly recognized:
Revenue is normally recognized when it is earned. Assuming all work was performed in April, the revenue should be recognized in April. (Dr. A/R; Cr. Revenue)
the revenue recognition principle dictates that revenue should be recognized in the accounting records?
Revenue is properly recognized as an income at the end of an accounting period. Any form of money received is regarded as revenue.
business entity assumption
credit to unearned revenue
Revenue is recognized when it is incurred in accrual accounting while in cash based accounting revenue is recognized when actual cash is paid
Business Accounting
No.
It is the basic rule of revenue recognition that unless and untill goods are not transferred to the customers revenue cannot be recognized and internation accounting standard number 2 deals in revenue recognition.
Deferred revenue is recognized when cash received in advance for product or service that not delivered or rendered, so it's liability, once service fulfilled or product received Revenue Would be recognized Deferred revenue also Known as unearned revenue