BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -According to the realization accounting concept, revenue is only recognized when it is realized. Now revenue is the cash inflow for a business arising from the sale of goods or services. And we assume this revenue as realized only when it legally arises to be received.

Detailed explanation-2: -The realization principle is the concept that revenue can only be recognized once the underlying goods or services associated with the revenue have been delivered or rendered, respectively. Thus, revenue can only be recognized after it has been earned.

Detailed explanation-3: -Revenue is recorded at the time goods or services are sold. Changes in financial information are reported for a specific period of time in the form of financial statements. Financial statements contain all information necessary to understand a business’ financial condition.

Detailed explanation-4: -Realisation being one of the fundamental principle of accouting states that revenue is recognised by the seller when it is earned irrespective of whether the cash from the transaction has been received or not. It is also known as revenue recognition concept.

Detailed explanation-5: -The concept of realisation states that revenue is realized at the time when goods or services are actually delivered. In short, the realisation occurs when the goods and services have been sold either for cash or on credit. It also refers to inflow of assets in the form of receivables.