Revenue Recognition Principle: Revenue Recognition Principle emphasizes, that the revenue and incurrence of related service must pertain to same period; hence it requires the recognition of revenue, in the same period as the service is provided. The revenue received in advance, should not be included under the revenues in income statement, as the service is yet to be provided, and the revenue, though received has not been actually earned. To Decide: Whether to agree or disagree with the position of Company W.

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Chapter 1, Problem 1.12BYP

To determine

Revenue Recognition Principle:

Revenue Recognition Principle emphasizes, that the revenue and incurrence of related service must pertain to same period; hence it requires the recognition of revenue, in the same period as the service is provided.

The revenue received in advance, should not be included under the revenues in income statement, as the service is yet to be provided, and the revenue, though received has not been actually earned.

To Decide: Whether to agree or disagree with the position of Company W.

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