REALIZATION PRINCIPLE Definition

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REALIZATION PRINCIPLE is that revenue should be recognized at the time goods is sold and services are rendered.

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INTERNAL AUDIT is an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization. The objective of internal auditing is to assist members of the organization in the effective discharge of their responsibilities. To this end, internal auditing furnishes them with analyses, appraisals, recommendations, counsel, and information concerning the activities reviewed. The audit objective includes promoting effective control at reasonable cost. Occasionally a corporation may contract an external auditor or firm to conduct its internal audit function.

LONG-TERM RECEIVABLE, in accounting, is any receivable that is scheduled or projected for receipt in greater than a 12-month period, e.g. notes receivable or a receivable in litigation.

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