Question

According to this principle, revenue is deemed to be realised when the goods have been transferred or the services have been rendered to a customer.

Options

• Matching principle

• Principle of full disclosure

• Dual aspect principle

• Realisation concept

Answer 1

Realisation concept

Explanation:

The realisation concept states that revenue is recognized and deemed to be realized when the goods have been transferred, or the services have been rendered to a customer. There is a reasonable certainty of payment. This principle ensures that revenue is recorded in the accounting period in which it is earned, not necessarily when payment is received.