Asked by Rachel Hwang on Jul 29, 2024
Verified
The revenue recognition principle applies to merchandisers by recognizing sales revenues when the performance obligation is satisfied.
Revenue Recognition Principle
The principle that companies recognize revenue in the accounting period in which the performance obligation is satisfied.
Merchandisers
Businesses that purchase and sell goods without significantly altering their form.
Performance Obligation
A duty or commitment that a company must fulfill to transfer a promised good or service to a customer.
- Gain insight into the revenue recognition principle and how it applies to entities engaged in merchandising activities.
Verified Answer
ZK
Zybrea KnightAug 01, 2024
Final Answer :
True
Explanation :
This statement is true. The revenue recognition principle requires companies, including merchandisers, to recognize revenue when goods or services have been provided to customers and performance obligations are satisfied.
Learning Objectives
- Gain insight into the revenue recognition principle and how it applies to entities engaged in merchandising activities.
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