Accounting Revenue Recognition is the process of recognizing revenue in accounting when it has been earned. This is done by showing that a company has provided goods or services to customers and they are obligated to pay for them. Generally Accepted Accounting Principles (GAAP) dictate that companies must recognize revenues when there is assurance of payment, not just when cash and products have exchanged hands. By setting up a proper system of recording income, businesses can ensure their revenues are accurately recorded. Revenue recognition is an important part of financial planning and keeping accurate financial records.