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Q. Explain about realization principle?
Realization of revenue Under the realization principle the accountant doesn't recognize (record) revenue until the seller obtains the right to receive payment from the buyer. The seller obtains this right from the buyer at the time of sale for merchandise transactions or when services have been performed in service transactions. Legally a sale of merchandise takes place when title to the goods passes to the buyer. The time at which title passes usually depends on the shipping terms- FOB shipping point or else FOB destination. As a practical matter accountants in general record revenue when goods are delivered. The benefits of recognizing revenue at the time of sale are (a) the actual transaction-delivery of goods-is an observable event (b) revenue is easily measured (c) risk of loss due to price decline or destruction of the goods has passed to the buyer (d) revenue has been earned, or substantially so and (e) because the revenue has been earned, expenses and net income can be determined. As discussed later the drawback of recognizing revenue at the time of sale is that the revenue might not be recorded in the period during which most of the activity creating it occurred.
Q. First-in first-out inventory? FIFO (first-in first-out): Ending inventory contains of the most recent purchases. FIFO presumes that the costs of the first goods purchased ar
You should have recorded in your cash books all amounts you've really received and payments you've really made. Though the cash books may be incomplete as your bank may have put ex
Mission statement for PCAOB and AICPA and how it contributed to GAAP 2-3 pages APA style
help with journalizing payroll transactions and filling on the cash payments journal, may 15, paid cash for april's payroll tax liability. withheld taxes from april payrolls; emp
Q. Explain about Staff accountant? Let us travel with Tracy as she begins her career at the staff level. At the onset, she works directly under a senior accountant on each of h
Woodie Limited issues $5 million in convertible bonds on 1 July 2012. They are issued at the fair value and pay an interest rate of 4 percent. The interest is paid at the end of ea
Q. Advantages and Disadvantages of LIFO? LIFO: Advantages (a) LIFO reports both sales revenue and cost of goods sold in current dollars and (b) lower income taxes result if use
On June 1st, Green Pea, Inc. purchased $1,200 worth of supplies on account. How does this transaction affect Green Pea's accounts? a. Increase supplies and accounts payable by $
A firm's __________ account is categorized as a current asset. A. equipment B. accounts payable C. bonds payable D. merchandise inventory
When a not-for-profit facility receives a contribution from a member of the community, the cost of the capital is inconsequential when deciding how to use the contribution, becau
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