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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
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.
The volume of a cube is 64.
Compare:
Column A: The area of the base of the cube
Column B: $32$
For a cube with volume $V = s^3 = 64$, the side length is $s = \sqrt[3]{64} = 4$.
The base of a cube is a square, so its area $= s^2 = 4^2 = 16$.
Column A = 16, Column B = 32.
Since $16 < 32$, Column B is greater.
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