The revenue recognition principle is a cornerstone of accrual accounting together with the matching principle. They both determine the accounting period in which revenues and expenses are recognized in the accounting records. According to the principle, revenues are recognized when they are realized or realizable, and are earned $($usually when goods are transferred or services rendered$),$ no matter when cash is received. Since this may occur at different times for some revenue transactions, the principle cannot be applied consistently to all revenue transactions. In contrast, in cash accounting, revenues are recognized when cash is received no matter when goods or services are sold.

Directions: Provide an argument as to why you think all revenue should be recognized at the same point or at different points. Be sure to provide details or statements to support your argument.

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There are arguments both for recognizing all revenue at the same point and for recognizing revenue at different points Lets explore both perspectives ... View the full answer