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WAEC Financial Accounting 2013 Question 26

Question 26

Accounting Concepts and Conventions

The accounting principle that states that, in the preparation of accounting statement, revenue are recognized as soon as goods are passed on to the customer is the

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

Answer: D (realization concept.)

Explanation

Under the realisation concept revenue is earned when goods pass to the customer, not when cash is received.