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Accounting
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21 Feb 2020

Explain briefly revenue recognition principle?

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Casey Durgan
Casey DurganLv2
21 Feb 2020
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Related questions

Revenue is recognized based on a five-step process that is applied to a company's revenue arrangements.

Requirements: 1. Describe the revenue recognition principle. Briefly describe the five-step process.

2. Explain the importance of contracts when analyzing revenue arrangements.

3. How are fair value measurement concepts applied in implementation of the five-step process?

4. Briefly discuss how the revenue recognition principle relates to the definitions of assets and liabilities.

5. In the previous revenue recognition guidance, revenue is not be recognized unless the revenue was realized or realizable (also referred to as collectibility). Is collectibility a consideration in the recognition of revenue? Explain.

6. Revenue is usually recognized at the point of sale (a point in time). Revenue may be also recognized over time. Give an example of the circumstances in which revenue is recognized over time and accounting merits of its use instead of the point-of-sale basis.

Research the revenue recognition accounting principle of VSOE. Provide outside resources and cite these sources.

Give an overview of how this method affects revenue recognition for companies selling bundled contracts.

How does this principle help a company report how itҀ™s truly performing financially?

Which of the following statements about accrual-basis accounting is not true?

a. It uses the revenue recognition principle.

b. It uses the expense recognition principle

c. It is required for external accounting reports.

d. It requires the timing of cash receipts to be in the same period as revenues are recognized.

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