ACC 100 Chapter Notes -Income Statement, Net Income, Gross Profit

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accounting notes
What is FOB destination?
Freight is paid by the shipper (supplier/seller).
FOB Shipping Point: Freight is paid by the buyer (purchaser)
Revenue Recognition Principal?
Revenue is recognized when earned.
More specifically when:
Performance achieved
Amount measurable
Collection assured
accountants need to identify alternatives points when revenue might be recognized, then consider
which alternative best satisfies ALL the recognition criteria, and make recommendation.
Matching Principal?
Expenses FOLLOW Revenues.
More specifically when:
when used up/consumed
when sold (transferred)
when incurred (passage of time)
TO HELP GENERATE REVENUE!
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