Which of the following statements is FALSE?

Solution

This statement is incorrect because revenue recognition is not solely dependent on cash receipt. According to AS-9 (Accounting Standard 9) on Revenue Recognition, revenue should generally be recognized when certain criteria are met, regardless of whether cash has been received. These criteria include: The significant risks and rewards of ownership have been transferred to the buyer. The seller retains no effective control over the goods or services. The amount of revenue can be reliably measured. It is probable that economic benefits associated with the transaction will flow to the seller. The costs incurred or to be incurred in respect of the transaction can be reliably measured. In short, revenue recognition is based on the fulfillment of specific criteria, and cash receipt is not the sole determining factor.