passwella.
Menu

WAEC Financial Accounting 2010 Question 29

Question 29

Accounting Concepts and Conventions

The realization concept states that

  1. A.revenue is recognized as being earned when ownership of goods passes to the customer
  2. B.revenue and profit should not be anticipated
  3. C.similar items should be accounted for in a similar way from one accounting period to another
  4. D.transactions must be expressed in monetary terms
Show the answer and explanation

Answer: A (revenue is recognized as being earned when ownership of goods passes to the customer)

Explanation

Realisation: revenue is earned when the goods (ownership) pass to the buyer, not when cash is received.