Revenue on an accrual-accounting basis must be both earned and realized (or realizable) before accountants recognize it

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Revenue on an accrual-accounting basis must be both earned and realized (or realizable) before accountants recognize it in the income statement. Companies recognize revenue in cash-basis accounting only when they have received the cash. Is an accrual-basis or cash-basis recognition of revenue more relevant for evaluating the performance of a sales staff? Why?

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Introduction to Management Accounting

ISBN: 978-0133058789

16th edition

Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta

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