Profits are recognised when goods are sold. What concept is this

  • A realization
  • B matching
  • C periodicity
  • D going concern

The correct answer is A. realization

The concept that profits are recognized when goods are sold is known as the Realization Concept.

According to this concept, revenue is recognized only when it is earned. In the context of selling goods, revenue is considered earned when the goods are delivered or sold to customers.

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