The revenue recognition principle:

Multiple Choice

• Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

• Prescribes that a company record the expenses it incurred to generate the revenue reported.

• Prescribes that accounting information is based on actual cost.

• Provides guidance on when a company must recognize revenue.

• Prescribes that a company report the details behind financial statements that would impact users' decisions.