BU127 Chapter Notes - Chapter 7: Bank Statement, Simmons Bedding Company, Cheque
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BU127 Full Course Notes
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Document Summary
Chapter 7: reporting and interpreting sales revenue, receivables, and cash. Recall: the revenue principle requires that revenues be recorded when earned. Revenues are considered to be earned when the following conditions are met: goods or services have been transferred/delivered, the entity retains neither continuing managerial involvement nor effective control, the amount of revenue can be measured reliably. 4: the costs can be reliably measured. It is probable that economic bene ts will ow to the entity. Companies accept credit cards for several reasons: to increase sales, to avoid providing credit directly to customers, to avoid losses due to bad cheques, to avoid losses due to fraudulent credit card sales, to receive payment quicker. When credit card sales are made, the company must pay the credit card company a fee for the service it provides. When companies allow customers to purchase merchandise on an open account, the customer promises to pay the company in the future for the purchase.
