COMM 293 Lecture Notes - Lecture 7: Revenue Recognition, Cash Flow, Cash Management
Document Summary
Apply the revenue principle to determine the accepted time to record sales revenue for typical retailers, wholesalers, manufacturers, and service companies. Analyze the impact of credit card sales, sales discounts, and sales returns on the amounts reported as net sales. Estimate, report, and evaluate the effects of uncollectible trade receivables (bad debts) on financial statements. Compute and interpret the trade receivables turnover ratio and the effects of accounts receivable on cash flows. The text materials contain many useful exhibits for this chapter. In addition, other chapter features useful in the teaching of this text are contained in this manual. This chapter discusses measuring, recording, and reporting of revenues, cash, and receivables on the financial statements. Revenue recognition policies are widely recognized as one of the most important determinants of the fair presentation of financial statements. For most merchandisers and manufacturers, the appropriate revenue recognition point is the time of shipment or delivery of goods.
