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Question
According to this principle, revenue is deemed to be realised when the goods have been transferred or the services have been rendered to a customer.
Options
Matching principle
Principle of full disclosure
Dual aspect principle
Realisation concept
Solution
Realisation concept
Explanation:
The realisation concept states that revenue is recognized and deemed to be realized when the goods have been transferred, or the services have been rendered to a customer. There is a reasonable certainty of payment. This principle ensures that revenue is recorded in the accounting period in which it is earned, not necessarily when payment is received.
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