A trader sold goods worth 6,600 on 31 March 2025 but did not produce the invoice until 3 days later. The sale should be recorded in the year ended 31 March 2025. Which accounting concept applies?ConsistencyPrudenceRealisation

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SSC Financial and Cost Accounting P-1 QUESTION #6130

Question 1

A trader sold goods worth $6,600 on 31 March 2025 but did not produce the invoice until 3 days later. The sale should be recorded in the year ended 31 March 2025. Which accounting concept applies?

Consistency
Prudence
Realisation

1 and 2
2 and 3
2 only
3 only✔️

Correct Answer Explanation

Option D (3 only) is correct.

The realisation concept states revenue is recognised when earned (goods transferred and risks/rewards pass), not when the invoice is raised. The sale was complete on 31 March, so it belongs in that year.

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