The correct answer is: D. Long-term construction contracts
The realization principle of accounting states that revenue should be recognized when it is realized or realizable, and expenses should be recognized when they are incurred. This principle is based on the idea that revenue should be matched with expenses in the period in which they are both incurred.
In the case of long-term construction contracts, revenue is not recognized until the contract is completed. This is because there is a significant risk that the contract will not be completed, and that the company will not be able to collect the revenue. Therefore, it is not appropriate to recognize revenue until the contract is completed and the risk of non-completion has been reduced.
The other options are incorrect because they are all industries in which revenue can be recognized when it is earned. In the service industry, revenue is recognized when the service is provided. In the mining industry, revenue is recognized when the minerals are extracted. In the railway transport industry, revenue is recognized when the passengers or goods are transported.
In conclusion, the realization principle of accounting does not apply to long-term construction contracts because there is a significant risk that the contract will not be completed. Therefore, it is not appropriate to recognize revenue until the contract is completed and the risk of non-completion has been reduced.