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Recognising revenue only once it has been earned follows the revenue:
ARedistribution principle
BReinvestment principle
CRecognition principle
DReconciliation principle
Answer & Solution
Correct answer: C. Recognition principle
1. Cash received in advance is not yet earned.
2. It sits as unearned revenue until the work is done.
3. That rule is the revenue recognition principle.
_Source: OpenStax Principles of Financial Accounting, Chapter 4, The Adjustment Process._
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