ACTG 2010 Study Guide - Final Guide: Balance Sheet, Write-Off, Contingent Liability
1 Feb 2013
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Delivery, subscription sales, advance payments, installment sales, admission fees, professional. Bill & hold arrangement recognize before shipment (buyer takes title and accepts billing) Consignment sale when producer recognizes revenue when entity sells merchandise. Depreciation how to record depreciation expense: straight-line, asset is depreciated by an equal amount over it"s useful life, same level of profits of its useful life, objective: income maximization. Expense unevenly spread higher expense beginning. Expense should __ be capitalized or expensed: capitalize as an asset. & amortize over periods in which they will bring benefit: provide future economic benefit. Help generate revenue no uncertainty: control over goods, past transaction, measurable. No future benefit : uncertainty of benefit, difficult matching expense incurred with the revenue it helps generate since period of time if benefit cannot be reasonably estimated, objective: income minimization. Distributor fees (can be recorded as prepaid asset), renovations, construction expenses relating to building assets, leased equipment (i. e. truck)
