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In accounting, the revenue recognition principle states that revenues are earned and recognized when they are realized or realizable, no matter when cash is received. It is a cornerstone of accrual accounting together with the matching principle. Together, they determine the accounting period in which revenues and expenses are recognized. [1]
The recognition heuristic, originally termed the recognition principle, has been used as a model in the psychology of judgment and decision making and as a heuristic in artificial intelligence. The goal is to make inferences about a criterion that is not directly accessible to the decision maker, based on recognition retrieved from memory.
This principle plays a significant role in both the concept of context-dependent memory and the concept of state-dependent memory. Examples of the use of the encoding specificity principle include; studying in the same room as an exam is taken and the recall of information when intoxicated being easier when intoxicated again.
Revenue recognition principle: holds that companies should record revenue when earned but not when received. The flow of cash does not have any bearing on the recognition of revenue. This is the essence of accrual basis accounting. Conversely, however, losses must be recognized when their occurrence becomes probable, whether or not it has ...
It is one of the three principles for defining income under the seminal case in this area of tax law, Commissioner v. Glenshaw Glass Co. [ 1 ] In that case, the Supreme Court interpreted a statute under the tax code and determined that income generally means "undeniable accessions to wealth, clearly realized, and over which the taxpayers have ...
Recognition is mostly a matter of timing; the issue is not whether income or loss is taken into account, but when. The time of recognition may matter for a number of reasons, including the time value of money and the section 1211(b) limitation on capital losses in a single year. [3]
But to be a valid rule, the legal system of which the rule is a component must, as a whole, be effective. According to Hart, any rule that complies with the rule of recognition is a valid legal rule. For example, if the rule of recognition were "what Professor X says is law", then any rule that Professor X spoke would be a valid legal rule.
Specificity of processing describes the increased recall value of a stimulus when presented in the method with which it was inputted. For example, auditory stimuli (spoken words and sounds) have the highest recall value when spoken, and visual stimuli have the highest recall value when a subject is presented with images. [6]