BU477 Chapter Notes - Chapter 12: General Ledger, Credit Risk, Subledger
Document Summary
Revenue cycle: involves decisions and processes necessary for transfer of ownership of g/s to (cid:272)usto(cid:373)ers after they"re (cid:373)ade a(cid:448)aila(cid:271)le for sale. Request by customer conversion of material/service into a/r of cash. Sales and collection cycle: decisions and processes necessary for transfer of ownership of g/s to (cid:272)usto(cid:373)ers after they"re (cid:373)ade a(cid:448)aila(cid:271)le for sale. Classes of transactions: sales, cash receipts, sales returns and allowances, charge-off of uncollectible accounts, bad-debt expense. Processing customer orders; granting credit; shipping goods; billing customers and recording sales; processing and recording cash receipts; processing and recording sales returns and allowances; writing off uncollectible a/r; providing for bad debts. Five step model for revenue recognition: identify the contract, identify the performance obligations, determine the transaction price, allocate the transaction price to the performance obligation, recognize revenue when each performance obligation is satisfied, recognize revenue over time when: The customer simultaneously receives and consumes the benefits provided as the entity performs them.
