Multiple choice

Revenue is assumed to be realised when a legal right to receive it arises. Which concept is this?

  1. Matching concept

  2. Dual aspect concept

  3. Cost concept

  4. Realisation concept
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The realization concept states that revenue should be recognized in the accounts only when it is realized, which is typically when a legal right to receive the money arises. This ensures that income is not recorded prematurely before a transaction is legally binding.

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