Recognition of Accounting Revenue

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Recognition of Accounting Revenue

Introduction

Revenue is mostly recognized at the point of sale. This occurs when a sales transaction takes place. The transaction may involve the delivery forthwith or the delivery may be scheduled. However, the revenue is received in that the sales transaction is either irreversible or that the transaction involves known allowance for bad debt in the case of account receivables. This happens when the transaction is not made in cash. Therefore, the revenue is recognized when the transaction has actually taken place and which implies that the good has changed hands and the ownership ...