When do accountants recognize revenue? Why is this so important in an accrual accounting system?© BrainMass Inc. brainmass.com June 4, 2020, 12:12 am ad1c9bdddf
When do accountants recognize revenue? Why is this so important in an accrual accounting system?
As per Netmba.com "The accounting process is a series of activities that begins with a transaction and ends with the closing of the books." Revenue recognition is an important element in the accounting process.
Recognition of Revenue
The inclusion of revenue in the profit and loss account. Revenue may be recognized when a contract of sale is made or, alternatively, when the cash has actually been received. Revenue is typically the single largest item reported in a company's financial statements.
Trends and growth in the Revenue of a company's income statement are barometers investors use when assessing the company's past performance and future prospects.It is regarded as bad practice to ...
Response discusses the accrual accounting system.