Revenue recognition: Revenue recognition is referred to the time of recognition of revenue by the business firms in the books for stating the respective revenue in the statement of profit and loss in the respective year and time. It does not make difference whether it is received or not. Accrual Accounting: In accrual-accounting method, the revenue is recognised at the point of sale i.e. when the possession is transferred to the customer. The probable consequences for the behaviour of Alan for increasing the sales of the company in the future periods.

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Chapter 5, Problem 89.2C

To determine

Revenue recognition:

Revenue recognition is referred to the time of recognition of revenue by the business firms in the books for stating the respective revenue in the statement of profit and loss in the respective year and time. It does not make difference whether it is received or not.

Accrual Accounting:

In accrual-accounting method, the revenue is recognised at the point of sale i.e. when the possession is transferred to the customer.

The probable consequences for the behaviour of Alan for increasing the sales of the company in the future periods.

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