
Revenue Recognition Principle:
Revenue is said to be recognized when firm become eligible to receive money for their work done and not when payment takes place.
Profit margin ratio:
It shows how much company is earning for every dollar of their revenue. It comes after dividing net sales from revenue in percentage terms.
1.
To explain: Revenue recognition principle.
2.
To explain: The way A. Company applies revenue recognition principle.
3.
Profit margin.
4.
To identify: Amount credited to income summary to summarize its revenue earned.
5.
To identify: Amount debited to income summary to summarize its expense incurred.
6.
To identify: Amount balance of income summary account before it is closed.
7.
Assess and compare profit margin ratio of 2 different years of A. Company.

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Chapter 3 Solutions
Gen Combo Ll Financial Accounting Fundamentals; Connect Access Card
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