The Generally Accepted Accounting Principles (GAAP) Revenue Recognition is a set of rules used to accurately record and report revenue transactions. This set of principles requires companies to recognize revenue when it is realized or realizable, and earned, regardless of when cash is received. Companies are also required to analyze their contracts with customers to ensure they are properly recognizing the revenue in accordance with GAAP guidelines. By following the GAAP Revenue Recognition Principle, companies can ensure that their financial statements provide an accurate picture of their financial performance.