FinAcct - Revenue Recognition

Card Set Information

FinAcct - Revenue Recognition
2011-12-13 21:25:03
TBird EMBA XXI Revenue Recognition Dale Davidson

This set of cards is revenue recognition
Show Answers:

  1. What must happens in order to trigger Revenue Recognition?
    You must be able to identify a "Critical Event" that triggers recognition.

    That event which establishes the first point in time where revenue meets all conditions for recognition.
  2. What are the conditions for Revenue Recognition?
    • 1. Earned
    • 2. Realized or Realizable
    • 3. Measurable
    • 4. Special Situation
  3. What is the definition of an Earned condition for revenue recognition?
    -substantially everything done to indicate that the earning process is completed; often, it is the point in time where the revenue could be legally claimed.
  4. What is the definition of an Realized or Realizable condition for revenue recognition?
    - to be recognized, there must be a reasonable expectation of collection.

    Installment and cost recovery methods.
  5. What is the definition of an Measureable condition for revenue recognition?
    -revenue must be subject to reasonal estimation to be recognized.
  6. What is the definition of an Special Situation condition for revenue recognition?
    - includes Commodities, franchises, retail land sales, insurance, buy-back checks.