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Discuss revenue recognition

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There are eight concepts that provide the theoretical support to accounting. Indicate why revenue recognition is important among these and what it dictates.

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There are eight concepts that provide the theoretical support to accounting. Choose one and describe why it is the one you have chosen.

I have chosen Revenue recognition concept.

Recognition of Revenue
This concept explain the situations where one will include revenue in the accounting books. Revenue may be recognized when a contract of sale is made or, alternatively, when the cash has actually been received.
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 recognize revenue before either it has been received in cash or its ultimate receipt has become certain enforceable. The fundamental revenue recognition concept is that revenues ...

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