Accounting Objective Question:

Which statement accurately reflects the significance of the Revenue Recognition Principle and its alignment with the objective of providing relevant and reliable financial information?

A$)$ The Revenue Recognition Principle ensures that revenue is only recognized when it is earned and realized or realizable, enhancing the reliability of financial statements.

B$)$ The Revenue Recognition Principle allows companies to recognize revenue whenever they receive cash, ensuring the timeliness of financial reporting.

C$)$ The Revenue Recognition Principle dictates that revenue should be recognized only after all expenses have been accounted for, promoting accuracy in financial reporting.

D$)$ The Revenue Recognition Principle applies only to service$-$based industries and does not impact the relevance or reliability of financial information.