Chapter 18 Revenue Recognition

Question 1

revenue recognition principal

Answer 1

1. When it is realized or realizable

2. when it is earned

Question 2

Proper Recognition Rev. involves 3 terms

Answer 2

1. Rev. is realized when a company exchanges goods/services for cash or A/R
2. Rev. is realizable when assets a company receives in exchange are readily convertible to known amounts of cash
3. Rev. is earned when a company has substantially accomplished when it must be entitled to do.