Which accounting principle states that revenue should be recognized only when it is actually earned, not necessarily when cash is received? MCQ with Answer and Explanation
Which accounting principle states that revenue should be recognized only when it is actually earned, not necessarily when cash is received?
A. Matching Principle
B. Conservatism Principle
C. Historical Cost Principle
D. Revenue Recognition Principle
Answer: Option D
Solution (By JKSSB Mock Tests)
The Revenue Recognition (Realization) principle dictates that revenue is recognized when the earning process is virtually complete and an exchange has taken place.
Explanation:
GST is a comprehensive, multi-stage, destination-based indirect tax. It is levied on every value addition, specifically on the supply of goods and services. Both statements are correct.
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