BUS 251 Chapter Notes - Chapter 4: Earnings Before Interest And Taxes

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 251
• Professor: Maureen Fizzel

Document Summary

4 - revenue recognition & statement of incomes. Nancial statements: nancial statement users can nd information re. a company"s revenue recognition policies in the notes to its nancial statements. General revenue recognition criteria: 1. it is probable that economic bene ts (cash, accts receivable) will ow into the company, 2. the amount of these bene ts can be reliably measured. Speci c revenue recognition criteria: 1. the sale of goods, 2. the provision of services; and. Eg. subscriber fees related to cell phones. Guest, charter, and cargo revenues when airlines provide ight services. Tuition revenues: 3. the receipt of interest, royalties, and dividends. Single-step statement of income: all items of revenue are presented rst regardless of the source, together with a total revenue amount - one arithmetic step is required to arrive at net income (loss) Multi-step statement of income: requires several steps to reach a company"s net pro t or loss: 1.