Economics · Accounting Principles
The Revenue Realization Concept in accounting states that:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Revenue is recognized at the time a customer places an initial purchase order with the business.
- 2Revenue is recognized when a transaction has been entered into and the legal obligation to pay has been established.✓
- 3Revenue is recognized at the time the company physically transfers the goods to the customer's warehouse.
- 4Revenue is recognized only when cash is physically received by the business.
Correct answer
Revenue is recognized when a transaction has been entered into and the legal obligation to pay has been established.
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