The revenue recognition principle states that we record revenue in the period in which we collect cash. True or False?

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What is the difference between IFRS and US GAAP in revenue recognition?
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Abdu Elshahir CMA Dipifr
29-April-2018

Office Management Accounting Sage Administration Finance

Question added by Divyesh Patel , Assistant Professional Officer- Treasury , City Of Cape Town
Date Posted: 2014/04/12

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8 Answers

by Mahmoud Hanafi , Financial Analyst , BIG - Beyout Investment Group

False !

It's all about Earning The Revenue Not Collecting.

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by Divyesh Patel , Assistant Professional Officer- Treasury , City Of Cape Town

Answer is False.

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by Deleted user

FALSE.The revenue recognition principle states that we record revenues when they are earned, not when we receive the cash.

later on, when we receive the cash, the accurate entry is a reduction in account receivable.

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by Bilal Murtaza , Finance and Administration Officer , Association for Behavior and Knowledge Transformation

False

IAS 18 Revenue states that revenue will be recognized when: Amount of revenue and cost can be measured reliablyEconomic benefits associated with the transaction will flow to the sellerIn case of sale of goods, risks and rewards associated with ownership are transferred and seller doesn't have continuing managerial involvement nor effective control over goods.In case of services, the stage of completion can be measured reliably at reporting date.

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by Deleted user

TRUE

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