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Revenue Recognition Principle

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What is the revenue recognization principle and conditions to allow cash basis accounting?

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Solution Summary

The expert determines what revenue recognization principle principle and the conditions which allow cash basis accounting.

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Cash basis accounting recognizes revenue actually received in cash irrespective of sales made on accrual basis.
It totally ignores revenue recognition principles which states that revenue should be recognized when sale is effected or service performed whether the consideration is received or deferred for next period. In accrual accounting revenue is recognized when it is actually earned ...

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