O-LevelAccountingAccounting principles and policies7707/12 · May/June 2024 · Q351 Mark
Which statement correctly describes the principle of realisation?
AProfit is earned when a cheque is received from a customer in payment for goods supplied.
BProfit is earned when a cheque received from a customer is paid into the business bank account.
CProfit is earned when the goods are supplied, and ownership passes to the customer.
DProfit is earned when the customer places an order for the goods.
✓ Correct answer
C: Profit is earned when the goods are supplied, and ownership passes to the customer.
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