2-Financial Statement & Revenue Recognition

Question 1

Bank Reconciliation

Answer 1

Balance on Bank Statement 
\+ Deposit in transit 
- Outstanding checks
\+/- Error made by bank 
=Corrected balance 

Checkbook Balance 
\+ Amounts collected by bank 
-Unrecorded bank charges 
\+/- Error made in recording transactions 
= Corrected balance

Question 2

Revenue Recognition Principle

Answer 2

1- Revenue is to be recognized upon the transfer of promised goods and services to customers
2-The amount of revenue recognized represents the consideration the entity expects to receive in exchange for those goods and services

Question 3

Revenue Recognition Steps

Answer 3

1-Identify contracts with customers
2-Identify all separate performance obligations within each contract
3-Determine the total consideration for the contract
4-Allocate the total consideration among the separate performance obligations
5- Recognize revenue