Answer
I. “When realizable”: For revenue to be realized, a business entity must exchange its services or merchandise, or assets. Once the exchange occurs, the selling entity gets claims to cash. Thus, the commodities that have been issued can be easily converted to cash.
ii. “When earned”: This occurs when the selling company meets all the requirements that give it the right to claim the revenues associated with the sale of assets.
an be easily converted to cash.
Work Step by Step
i. “When realizable”: For revenue to be realized, a business entity must exchange its services or merchandise, or assets. Once the exchange occurs, the selling entity gets claims to cash. Thus, the commodities that have been issued can be easily converted to cash.
ii. “When earned”: This occurs when the selling company meets all the requirements that give it the right to claim the revenues associated with the sale of assets.
