Which of the following statements about theRevenue Realization and Matching principles isNOT true?Revenue is recognised when theearnings process is complete1.An item of cost (an expenditure) musteither be recognised in the FinancialStatements as an asset or an expenseRevenue can only be recognisedwhen it occurs in an arms-length3.transactionAn expense can only benefit thecurrent period whereas anexpenditure can be of benefit acrossmultiple accounting periods2.4.

Option 1 is wrong because the statement is true. Revenue should be recognized when the process of…

Answered: Revenue Realization and Matching…

Business

Accounting

Revenue Realization and Matching principles

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Which of the following statements about the
Revenue Realization and Matching principles is
NOT true?
Revenue is recognised when the
earnings process is complete
1.
An item of cost (an expenditure) must
either be recognised in the Financial
Statements as an asset or an expense
Revenue can only be recognised
when it occurs in an arms-length
3.
transaction
An expense can only benefit the
current period whereas an
expenditure can be of benefit across
multiple accounting periods
2.
4.

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