Accounting · Accounting Concepts
Which of the following statements is INCORRECT in the context of accounting concepts?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Accounting systems based on the accrual concept are also known as the Mercantile System of Accounting.
- 2The realization concept is related equally to both the recognition of revenues and matching of expenses.✓
- 3In the case of a sale on an installment basis under hire purchase transactions, the cash received in the form of installments forms the basis of revenue recognition over time.
- 4In the case of precious metals like gold, revenue is recognized when gold is mined and not necessarily when it is sold.
Correct answer
The realization concept is related equally to both the recognition of revenues and matching of expenses.
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