The accounting principle that states that, in the preparation of an accounting statement, revenue is recognized as soon as goods are passed on to the custom...

The accounting concept being tested here is the realization concept. It states that revenue should be recognised in the accounting records at the point the goods (or services) are transferred to the customer and the business has a legal right to payment, regardless of when the cash is actually received.

This matters because it fixes the moment a sale is recorded: as soon as ownership and risk pass to the customer, the transaction is treated as complete for accounting purposes, and the sale is entered in the books, even if the customer is allowed to pay later on credit.

It is easy to confuse this with the matching concept, which is about pairing expenses with the revenue they helped generate in the same period, not about the timing of revenue recognition itself. The materiality concept concerns whether an item is significant enough to warrant separate disclosure, and the consistency concept concerns applying the same accounting methods from one period to the next; neither addresses when revenue should first be recorded.

When a question describes revenue being recognised "as goods change hands" rather than "as cash is received," that is the realization concept at work.