Introduction
Revenue recognition is an accounting principle which stipulates the exact time on which revenues from an activity can be recognized in the financial statements of a company. According to this principle, the appropriate time for revenue recognition is when the service has been rendered, as opposed to when the revenue is collected from the client. Explained in practical terms, Trackon ltd, company that sells consumer goods and commits to a transaction in the last month of an accounting year, whereas the revenues are collected in the next accounting period, in the books of account Trackon ltd will record the income in ...
