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Match the description of each step used to apply the revenue recognition principle with its step number.: 1. Allocate the transaction price to each performance obligation 2 Determine the transaction price 3. Identify the contract with a customer 4.Identify the performance obligation(s) in the contract 5. Recognize revenue when (or as) each performance obligation is satisfied

Respuesta :

To apply the revenue recognition principle, here are the steps:

  1. Identify the contract with a customer.
  2. Identify the performance obligation(s) in the contract.
  3. Determine the transaction price.
  4. Allocate the transaction price to each performance obligation.
  5. Recognize revenue when (or as) each performance obligation is satisfied.

What is Revenue Recognition Principle?

The revenue recognition principle is one of the principles used in accounting. This revenue recognition principle is used to identify in which revenue is recognized and determines how to account for it. The revenue recognition principle uses accrual accounting. The main purpose of using this principle is to dictates that companies recognize revenue as it is earned, not when they receive payment.

Learn more about the revenue recognition principle at https://brainly.com/question/26275324

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