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      Question

      Which accounting principle/concept states that revenue

      should be recognized when it is earned, regardless of when cash is received?
      A Matching Principle Correct Answer Incorrect Answer
      B Accrual Principle Correct Answer Incorrect Answer
      C Conservatism Principle Correct Answer Incorrect Answer
      D Consistency Principle Correct Answer Incorrect Answer
      E Going Concern Concept Correct Answer Incorrect Answer

      Solution

      The accrual principle dictates that transactions are recorded in the period they occur, meaning revenue is recognized when earned and expenses when incurred, regardless of the timing of cash flows.

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