A company recognizes revenue in the period in which it records an asset for the related account receivable, rather than in the period in which the account receivable is collected in cash. This company is using:
A) Cash-basis accounting.
B) Accrual-basis accounting.
C) The recording principle.
D) The entity assumption.
Ch3 answer: B
Which accounting principle states that a company should "record revenues when they provide goods and services to customers?"
A) Valuation.
B) Revenue recognition.
C) Conservatism.
D) Materiality.
Ch3 answer: B
