Key "Concepts" for first midterm

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5 criteria for identifying the critical event (sale of goods) when all the following are satisfied. Performance: significant risks and rewards transferred, seller has no involvement or control over the goods. Collectability: collection of payment is reasonably assured. Measurability: the amount of revenue can be reasonably measured, the costs of earning the revenue can be reasonably measured. Judgment is required in applying the guideline, based on this 1 over- riding criterion (check if it makes sense). Important due to: not everyone is able to find the information in the notes. Users also need to understand how revenue is recognized. The preparers self interest can affect the choice. 1: percentage-of-completion recognizing both revenue and expenses to some level of performance/progress.

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