International Accounting and Finance Degree BAB120 Lecture 4: ACC 110 CH4
10 Dec 2015
School
Professor
Document Summary
Interim periods:shorter time periods than a fiscal year. Revenue recognition:the concept that revenue is generally considered to be earned(recognized) when goods or services are exchanged for cash or claims to cash (such as accounts receivable), which results in an increase in future economic benefits. The sales or performance effort substantially complete: revenue amount determinable, collection reasonably assured. In a merchandising company-revenue is recognized (recorded) when the merchandise is sold (normally at the point of sale: expense recognition: In a service company, revenue is recognized (recorded) at the time the service is performed. When there is a direct association between the expenses incurred and the generation of revenue, expenses (effort) are matched with revenues (results) Accrual basis accounting:an accounting basis in which transactions that change a company"s financial statements are recorded in the periods in which the events occur, rather than in the periods in which the company receives or pays cash.
