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Importance of recognising revenue

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Why is it important to properly recognize revenue when preparing income statements?

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This solution describes the importance of properly recognizing revenue in the preparation of an income statement.

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Why is it important to properly recognize revenue when preparing income statements?

While preparing income statement, the revenue should be entered in the credit side and expenses should be entered in the debit side. The revenue should be recognized on the basis of the accrual system of accounting .i.e., the revenue should be recognized as soon as it is earned. Revenue should be properly recognized if the ...

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