Signup as a Tutor

As a tutor you can connect with more than a million students and grow your network.

Introduction To Accounting: Part 18: Revenue Recognition Concept Or Realisation Concept

Nishant Kumar
28 Jun 0 0
  1. According to the Revenue Recognition Concept, revenue is considered to have been realised when a transaction has been entered into and the obligation to receive the amount has been established.

  2. It is to be noted that recognising revenue and receipt of an amount are two separate aspects.

  3. Examples:

  • An enterprise sells goods in December, 2017 and receives the amount in April, 2018. Revenue of this sales should be recognised in December, 2017, i.e. when the goods are sold. It is so because the legal obligation has been established (upon sales) in December, 2017.

  • Suppose, an enterprise has received an advance in December, 2017 for sales to be made in April, 2018. In this case, revenue shall be recognised in April, 2018, when the sale will take place because the legal obligation to receive the amount would be established in April, 2018.


0 Dislike
Follow 0

Please Enter a comment


Other Lessons for You

Laws Of Motion
Newtons laws of motion: First law: Law of inertia: Every body continues to be in its state of rest or of uniform motion in a straight line unless compelled to change that state by an external unbalanced...

Shafeequ Rahman | 1 day ago

0 0
Java 9 , the new beginning
Java 9 is here! A major feature release in the Java Platform Standard Edition is Java 9 Lets see what more it offers more than its previous versions Java platform module JEP 223 : New version string...

GCC | 09 Nov

0 0
Ethnicity: BA Sociology
Q. Examine the context of the rise of ethnic nationalism and the approaches that aim to resolve them.Major regions and the sub-regions of the world have experienced some form of ethnic nationalism and...

Revati A. | 06 Nov

0 0
Parallelogram Law Of Vectors
If two vectors acting simultaneously on a particle are represented in magnitude and direction by the two adjacent sides of a parallelogram drawn from a point, then their resultant is completely represented...
Permutations And Combinations
Q: There are 9 objects and 9 boxes. Out of nine objects, 5 can not fit in three small boxes. How many arrangements can vere made such that each object can put in one box only? Ans : As 5 objects can not...

Looking for Class XI-XII Tuition (PUC) ?

Find best Class XI-XII Tuition (PUC) in your locality on UrbanPro.

Do you offer Class XI-XII Tuition (PUC) ?

Create Free Profile »

Find Best Class XI-XII Tuition (PUC) ?

Find Now »