101 Revenue Recognition Principle

Accounting Instruction, Help, & How To
Accounting Instruction, Help, & How To
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Revenue recognition principle, foundational accrual principle defining and explaining when revenue is recognized and why, explaining the point in time revenue should be recognized under an accrual process.  Accrual method tries to find the specific point in time when revenue was earned, while the cash method uses the receipt of cash as being close enough the point in time that revenue was earned. Recognizing revenue when earned is the accrual concept of revenue recognition.
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