Revenue is generally recognised as being earned at that point of time when ____________.

Sale is effected

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Cash is received

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Production is completed

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Debts are collected

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Solution

The correct option is B Sale is effected
Accounting is based on certain concept, realization concept is one of these. This concept assumes that the revenue is recognized only when there is sale or transfer of the goods or assets. Sale is complete when the title of the goods is passed on to the buyer.

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