Question

The rule that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of asset associated with revenue to be in a form other than cash, and (3) measures the amount of revenue as the cas plus the cash equivalent value of any noncash assets received from customers in exchange for goods or servi is called the:____________ A. Going-concern assumption. B. Cost principle. C. Revenue recognition principle. D. Objectivity principle. E. Business entity assumption.

Answer 1

The correct answer is C

Step-by-step explanation:

Principle of Revenue recognition, is the one of the foremost and vital principle of accounting, which is also the cornerstone of the accrual accounting along with the matching principle.

Under this principle, the revenues are recognized or ackowledged when they are realized or earned, which is generally when the goods are transferred or the services are rendered, irrespective of when cash is received.

So, the rule which says revenue to be recognized when earned and measure the revenue amount equal to value of non- cash assets received from clients is known as revenue recognition principle.