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In income statement, do we record revenue on cash basis or accrue basis?

Accounting Analysis
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Question added by Mohannad Alhariri , Auditor and Tax Advisor , PWC Syria LTD
Date Posted: 2013/05/27
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Muhammad Afaq
by Muhammad Afaq , SENIOR FINANCIAL ACCOUNTANT , United Eddy Company (United Yousef M. Naghi Group)

The firms practice accounting treatment on accrual basis , therefor, we recognize revenue on accrued basis.

Muhammad Zuhair Shah

Normally it is recorded on accrual basis as per accounting principles. One exception to it is government accounts where revenues are recorded on cash basis.

James Mwangi
by James Mwangi , junior accountant , HENRY SMITH &WILSON AUDIT FIRM

where the entity uses cash basis concept accrued revenues arenot included but for accrual concept they are recognised

Anna Mae Bardeloza
by Anna Mae Bardeloza , ACCOUNTANT , GLOBAL MARKETING SYSTEMS DMCC

We record revenue on accrual basis. This follows the accrual basis of accounting.

Muhammad Kashif Amin
by Muhammad Kashif Amin , Management Controller , The Family Group (Hasnain Techno, SK Enterprises, Lasani Burgers)

Income statement is being prepared on accrual accounting basis, therefore, the revenue is to be recorded on the basis of supply of goods or rendering of services irrespective of receipt of cash against those goods or services. Therefore, revenue should be recorded when all of the following criteria are met:

  1.  the associated significant risks and rewards have been transferred to buyer
  2. the seller does not have continuing managerial involvement nor control over the goods sold
  3. the amount of revenue can be measured reliably
  4. it is probable that economic benefits will flow to the organization
  5. the cost incurred or to be incurred in respect of transactions can be measured reliably

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