Wednesday, 18 January 2012
Guidelines for Revenue Recognition
In general, the guidelines for revenue recognition are quite broad. On top of the broadguidelines, certain industries have specific additional guidelines that provide furtherinsight into when revenue should be recognized. The revenue recognitionprinciple provides that companies should recognize revenue (1) when it is realizedor realizable and (2) when it is earned. Therefore, proper revenue recognitionrevolves around three terms Revenues are realized when a company exchanges goods and services for cash orclaims to cash (receivables).Revenues...
Who Uses Accounting Data
The information that a user of financial information needs depends uponthe kinds of decisions the user makes.There are two broad groups of usersof financial information: internal users and external users. INTERNAL USERSInternal users of accounting information are those individuals inside a companywho plan, organize, and run the business. These include marketing managers, productionsupervisors, finance directors, and company officers.Managerial accounting provides internal reports to help usersmake decisions about their companies. Examples...
WHAT IS ACCOUNTING? (2)
Why is accounting so popular? What consistently ranks as one of the topcareer opportunities in business? What frequently rates among the mostpopular majors on campus? What was the undergraduate degree chosenby Nike founder Phil Knight, Home Depot co-founder Arthur Blank, former actingdirector of the Federal Bureau of Investigation (FBI) Thomas Pickard, and numerousmembers of Congress? Accounting.1 Why did these people choose accounting?They wanted to understand what was happening financially to theirorganizations. Accounting is the financial information...
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