The Realisation Concept Determines When Goods Sent on Credit to Customers Are to be Included in the Sales Figure

The realisation concept determines when goods sent on credit to customers are to be included in the sales figure for the purpose of computing the profit or loss for the accounting period. Which of the following tends to be used in practice to determine when to include a transaction in the sales figure for the period. When the goods have been:

a. dispatched
b. invoiced
c. delivered
d. paid for Give reasons for your answer.

b. invoiced

Explanation:

When the goods are invoiced, it is treated as the transfer of ownership of goods from the seller to the buyer and hence the revenue is recognised.

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NCERT Class 11 Theory Basic of Accounting-Accountancy