COMM-3016EL Chapter Notes - Chapter 6: Fide, Income Statement, Installment Sale
1 Mar 2018
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Document Summary
Understanding the nature of sales transactions from a business perspective. It is critical to understand from a business perspective what is being given up in the transaction and what is being received in most selling transactions, an entity gives up one asset in exchange for another. Before we can account for a sales transaction, we need to ask: are we selling goods, services, or both? and. What is the physical nature of the transaction? . Sales of goods and of services are different. Many contracts involve bundled sales (multiple deliverables) which is the sale of multiple goods and/or services for one price. This adds even more complication because possession & legal title to goods might pass before, after, or during the time when services are rendered. Next, we need to ask regarding a sales transaction: what is being received? and what are we getting back? .
