Revenue recognition via legal title transfer

Steps:

• Identify the statement's focus: revenue earned only when legal title passes to the buyer.
• Recall accounting principles related to revenue: realisation ties revenue to transfer of ownership.
• Eliminate unrelated principles: going concern assumes business continuity, matching pairs expenses with revenues, money measurement records only monetary transactions.
• Confirm match: the statement describes the realisation principle's core rule.

Why D is correct:

• The realisation principle states revenue is recognised when goods or services are delivered and legal title transfers, ensuring earned status.

Why the others are wrong:

• A: Going concern assumes the business will continue indefinitely, unrelated to revenue timing.
• B: Matching allocates expenses to the period of related revenue, not when revenue is earned.
• C: Money measurement records only quantifiable monetary events, ignoring non-monetary aspects like title transfer.

Final answer: D