Which of the following situations is a violation of the revenue recognition prin

Question

Which of the following situations is a violation of the revenue recognition principle?

Recording revenues when the goods or service is provided

Recording expenses when the cost is incurred

Recording revenues when the cash is received and the service is provided

Recording revenues when the cash is received and the service has not yet been provided

Recording revenues when the goods or service is provided

Recording expenses when the cost is incurred

Recording revenues when the cash is received and the service is provided

Recording revenues when the cash is received and the service has not yet been provided

Explanation / Answer

d. Recording revenues when the cash is received and the service has not yet been provided

As per the Revenue recognition priciple, it states that revenue should be recognised or recorded in the period in which goods or services are provided, whether cash is received or not does not matter.

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