The recognition principle states that: a) costs should be recorded on the income statement whenever those costs can be reliably determined.
b) costs should be recorded when paid.
c) the costs of producing an item should be recorded when the sale of that item is recorded as revenue.
d) sales should be recorded when the payment for that sale is received.
e) sales should be recorded when the earnings process is virtually completed and the value of the sale can be determined.

e) sales should be recorded when the earnings process is virtually completed and the value of the sale can be determined.

Explanation:

The recognition principle states that sales should be recorded when the earnings process is virtually completed and the value of the sale can be determined. Recognition principle is one of the principle defined by the Generally Accepted Accounting Principles (GAAP).

Basically, it states that revenues are to be indicated on the income statement during the period when they are earned but not the period in which they are received or collected. The recognition principle is in accordance or in tandem with the accrual basis of accounting and not the cash basis of accounting.

15 pounds of apples and 6 cups of flour

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