Question 3 April 2005 Exam : Sales revenue should be recognised when goods and services have been supplied; costs are incured when goods and services have been received. The accounting concent which governs the aboive is the A Accruals concept B Materiality concept C Realisation Concept D Dual Aspect concept Answer = C Mind = Destroyed
Hi Hope your mind is recovering I think this question is a bit tricky too. On first read, I thought either A or C could be correct (accruals for the costs part and realisation for the revenues). However, I don't think it can be the accruals concept (A), as the question refers to costs being "incured", whereas accruals is about when they are "recognised". So, I think the concept they're after must be realisation (ie the correct recognition of revenues)..... Best wishes Lynn
