ORIE ch 6 outline - ORIE 350 CH 6 OUTLINE CH...

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ORIE 350 CH 6 O UTLINE C H 6—R ECEIVABLES EVENUE R ECOGNITION 1. R EVIEW OF I NCOME R ECOGNITION P RINCIPLES 1. Flow of operating activities 1. (1) 2. (2) Period of Production 3. (3) Sell Product 4. (4) Period of Holding Receivable 5. (5) Collect Cash 6. (6) Periods of Returns and Warranty Services 2. Amount of Income from these operating activities 1. = Cash received at (5) – Cash paid to suppliers of goods/services at (1) (2) (3) (4) – Cash/other assets spent during (6) 2. Income measures economic value added from operating activities 3. Excess of cash inflows over cash outflows measure this economic value added 3. Measurement of Income for Discrete Accounting period 1. Accrual accounting must allocate income to 1+ accounting periods 4. Matching Expenses with Revenue 1. Recognize revenue at the time of sale – time (3) 5. Timing of Revenue Recognition 1. 2 GAPP requirements 1. [1] a firm has performed all of the services it expects to provide 2. [2]
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ORIE ch 6 outline - ORIE 350 CH 6 OUTLINE CH...

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