on december 30th of the current year, kpmg signs a $150,000 contract to privide accounting servies to one of its clients in the next year. kmpg as a december 31 year-end. which accounting principles or assumptions requires kpmg to record the accounting services revenue from this client in the next year and not in the current year?

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08-11-2022
Business

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on december 30th of the current year, kpmg signs a $150,000 contract to privide accounting servies to one of its clients in the next year. kmpg as a december 31 year-end. which accounting principles or assumptions requires kpmg to record the accounting services revenue from this client in the next year and not in the current year?

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singhanupama3490 singhanupama3490 · Answer 1 · 2022-11-14T12:15:38+01:00

According to the business entity principle, a corporation and an individual or group of individuals are two distinct economic entities in the books of accounts. correct option is (B).

The recording of revenue in the books of accounts is related to the revenue recognition principle. When and how to recognize and record revenue in the books of accounts are dictated by this principle for the accountant. This principle states that the business acknowledges revenue when it is generated, realized, or not when settlement occurs. In this instance, signing a contract does not result in income being earned. When the corporation provides its services.

How do you recognize revenue?

According to the concept of revenue recognition, as opposed to being received, revenue is recorded when it is realized, or realizable and earned. Before looking at various exceptions to the rule, learn about the fundamentals and procedure of revenue recognition with examples of the recognized criteria.

Learn more about business entity principle here:

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The question was incomplete. Check below the complete question.

on december 30th of the current year, kpmg signs a $150,000 contract to privide accounting servies to one of its clients in the next year. kmpg as a december 31 year-end. which accounting principles or assumptions requires kpmg to record the accounting services revenue from this client in the next year and not in the current year?

a. Business entity assumption

b. Revenue recognition principle

c. Monetary unit assumption

d. Cost principle

e. Going-concern assumption