This document discusses the revenue realization principle in accounting. It defines revenue as the value of goods and services transferred to customers, usually in exchange for cash or accounts receivable. For revenue to be recognized under the accrual method, there must be objective evidence that a sale has occurred, such as when ownership of goods or services is transferred from the seller to the buyer. The timing of when ownership transfers can depend on shipping terms like FOB (free on board) destination or shipment. The cash basis method only recognizes revenue when payment is received rather than when a sale occurs.