Accounting Case
Revenue recognition is a significant issue for several interrelated reasons. Appropriate guidelines for determining when revenue is recognized can keep companies from inflating their profits and boosting their apparent standing as well as establish criteria that makes it more difficult for companies to hide revenue for tax saving purposes or other reasons (Investopedia 2011). Generally speaking, revenues are recognized when payment is received for the rendering of services or provision of goods by a company, though in certain situations other criteria should be met or events occur before revenue is recognized (Investopedia 2011). Companies that extend large amounts of credit with high rates of return might reasonably count revenues at the time of service/good provision and before actual payment is received, for instance, while companies that receive a lot of returns should do just the opposite.
The matching concept requires that the assets responsible for the creation of recognized revenues...
Accounting Concepts Revenue Recognition: Its Relevance and Significance In the words of Kimmel, Weygandt and Kieso (2008), "the revenue recognition principle requires that companies recognize revenue in the accounting period in which it is earned." Unlike is the case in the cash basis of accounting, revenue under the accrual accounting basis is recognized on the sale of a certain commodity or the performance of a given service. Under the cash basis
Revenue recognition is significant because it not only defines to the leaders of the company that the product sold is doing well in its markets but also that the price on the product is comparable to the competition - shown through the return of high premiums and that all expenses to make said product are being received through the sale of these products. "Process of recording revenue, under one of
Revenue Recognition Revenue is a mode of taxation that is charged by the central governing authority for the purpose of generation income for the government. Revenue is charged on various items from the companies or on businesses that are conducted within the jurisdiction of the ruling authority (Bragg, 2010). Revenue generation is a process that is crucial as it touches on the income and profit made by the body that is
Jet Blue Case StudyWill the new revenue standard provide more decision-useful information than prior U.S. GAAP?Generally speaking, revenue recognition is the process of recording revenue in a company\\\'s accounting records. However, there are different ways to approach revenue recognition, and each perspective may slightly alter the way that revenue is recorded. For example, the cash basis approach simply records revenue when cash is received, regardless of when the product or
accounting questions while the rest centers on the characteristics of two certain companies, those being Apple and Philips. Accounting Questions & Answers The first accounting question is why revenue recognition is a significant issue. Recognizing when revenue comes in, what specific revenue stems from and the exact amount of all of the above is a very vital part of the accounting process because it has a direct correlation and effect on
Accounting includes recording, summarizing, and reporting of the economic activities and events of an organization. It is pertinent in business decision-making and the management and control of operations. The financial statements reported by a company include the income statement, balance sheet, statement of retained earnings and statement of cash flows. Globally, there are two sets of accounting standards, the Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).
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