
The revenue recognition principle:
The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.
Deferred revenues:
Collection of cash in advance to render service or to deliver goods in future is known as unearned revenues. These unearned revenues are considered as liabilities until they are earned. For the portion of rendered services or delivered goods, revenues would be recognized by way of passing an
To calculate: The value of the revenue for Company VTS.

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Chapter 5 Solutions
Intermediate Accounting
- Thompson Corp has revenue of $735,000, cost of goods sold of $248,000, operating expenses of $169,000, and pays $85,000 in taxes. What is the net income?arrow_forwardCan you demonstrate the accurate method for solving this financial accounting question?arrow_forwardSolve this financial Accounting problemarrow_forward
- Can you solve this financial accounting problem using appropriate financial principles?arrow_forwardSales are $1,000,000 for a product with a variable cost per unit of $6 and a sales price of $20. If fixed costs are $250,000, what is the contribution margin? A. $200,000 B. $700,000 C. $500,000 D. $400,000arrow_forwardCalculate free cash flow for this financial accounting questionarrow_forward
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
