According to the realization concept this revenue has been realized but not earned.(OPTION B)
Realization Concept: According to the realization principle, revenue cannot be recognized until the underlying items or services have been delivered or provided, respectively. So, only when it has been earned, can revenue be recognized.
Example of the realization principle:
The consumer pays when the item ships, but the sale cannot be recorded as income until the customer receives the shoes and the transaction is complete. The revenue can then be recognized, and the amount can be entered into your client's ledger.
Realization concept would apply when goods are delivered to customer.
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