Chapter 5,6,7

Chapter 5,6,7 - Chapter 5 Income measurement and...

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Chapter 5 – Income measurement and profitability analysis Chapter 6 – Time Value of money Chapter 7 – Cash and receivables Chapter 5 - income measurement and profitability analysis Under the Realization Principle revenue is earned when: 1. There is reasonable certainty as to the collectability of the asset to be received 2. The earnings process is virtually complete The SEC issued a bulletin providing additional criteria for judging whether or not the realization principle is satisfied: 1. Persuasive evidence of an arrangement exists 2. Delivery has occurred or services have been rendered 3. The seller’s price to the buyer is fixed or determinable 4. Collectability is reasonably assured Percentage of completion method: Recognizes revenue prior to delivery Revenue recognized each period Completed contract method: Recognizes revenue at delivery At the completion of contract Installment sales method: Recognizes revenue after delivery When cash is collected
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This note was uploaded on 02/07/2012 for the course ACG 4101 taught by Professor Lin during the Spring '09 term at FIU.

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Chapter 5,6,7 - Chapter 5 Income measurement and...

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