Revenue recognition refers to the accounting process of recognizing revenue for goods and services that have been delivered or rendered. It is a key component of the Generally Accepted Accounting Principles (GAAP) framework, as it allows companies to properly report their financial results. In order to ensure accuracy and consistency, organizations must adhere to the principal methods of revenue recognition that have been established by the Financial Accounting Standards Board (FASB). These methods include the following: 1) Completed-Contract Method; 2) Completed-Performance Method; 3) Proportional Performance Method; 4) Installment Method; 5) Percentage of Completion Method; 6) Modification Method; and 7) Cost Recovery Method. Each method has its own distinct characteristics and should be applied depending on the type of transaction. Following the appropriate revenue recognition method will help organizations accurately reflect their sales activities in their financial statements.