lec13_AR_Blackboard

lec13_AR_Blackboard - Revenue Recognition Refinements and...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Revenue Recognition Refinements and Accounts Receivable
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Assuming no I,W, G,L income = R-E = ΔOE ΔOE = Δ(A-L) 2200 R-E = ΔA - ΔL
Background image of page 2
Learning Objectives Examine some exceptions to the realization principle. Understand how receivables are reported and why.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Revenue recognition Recall that revenues are typically recognized when realized. In most cases realization occurs at point of sale. There are a few exceptions to this rule.
Background image of page 4
Revenue Recognition Prior to Delivery i.e.; when production is complete During production: Production costs XXX Payable & assets XXX End of accounting period: Inventory XXX Revenue XXX When shipments made: A/R XXX Inventory XXX
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Example: Assume fixed price of gold per ounce = $300, production costs = $8,500, ounces produced = 50 oz. During production: Production costs 8,500 Cash 8,500 When production is complete: Inventory 15,000 Revenues 15,000 When shipments is made: A/R 15,000 Inventory 15,000
Background image of page 6
Recognition During Production Accounting for Long-Term Construction Contracts Facts: Construction period is 3 years; fixed contract price is $500,000; expected gross margin is $100,000. 12/31/1 12/31/2 12/31/3 Costs incurred $60,000 $170,000 $185,000 Est. costs to complete 340,000 180,000 -0- Fixed contract price 500,000
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 31

lec13_AR_Blackboard - Revenue Recognition Refinements and...

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online