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JAMB Principles of Accounts 2014 Question 3

Question 3

Accounting Concepts and Conventions

The concept which states that revenue should be recognized at the point when the sale is deemed to have been made is

  1. A.matching.
  2. B.consistency.
  3. C.realization.
  4. D.going concern.
Show the answer and explanation

Answer: C (realization.)

Explanation

The realisation concept counts revenue when the sale is made (goods pass to the buyer), not when cash is received.