Income Determination Flashcards
1
Q
Generally Income accrues only at time of sale and gains may not be anticipated. What is the exception?
A
Agriculture products that are homogeneous and have immediate marketability at quoted prices (Cotton) (ASC 905-330-30-1)
2
Q
Revenue can only be recognized at the time of sale ONLY if all conditions are met
A
Price is Fixed and Readily Determinable
Buyer is obligated to pay or has paid the seller (Obligation not contingent on resale of product)
Obligation to the seller remains unchanged even in the event of damage/destruction of product
Buyer is independent from the seller
Seller does not have obligations regarding resale to the buyer
The Amount of future returns can be reasonably estimated
