Question

Multiple Choice Question

The concept or principle that states that companies should recognize revenue when goods or services are transferred to customers for the amount the company expects to be entitled to receive in exchange for goods and services is referred to as the:
- Realization principle
- Step 5 of the revenue recognition principle
- Core revenue recognition principle
- Matching principle

Answer 1

The correct answer is - Core revenue recognition principle.

Step-by-step explanation:

The stipulations of an exchange transaction or other conditions related to the recovery of accounts receivable over a long period may prevent a reasonable estimate of the collectibility of such accounts. Both the term sales method and the income and cost recovery method can be used for the recognition of income and expenses, during the entire period in which collectibility is not reasonably assured.