Define revenue recognition and also, define the statement given by GAPP about proper revenue recognition.

Question

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Answer 1

Question

Chapter 7, Problem 1RC

To determine

Define revenue recognition and also, define the statement given by GAPP about proper revenue recognition.

Expert Solution & Answer

Explanation of Solution

Revenue Recognition:

Revenue recognition is the recording of revenues in the books of the company only when they are realized and earned. Revenues are considered to be earned when they are generated by entity’s revenue-earning activities.

On the other hand, revenues are realized when certain conditions are met. For instance, selling price is fixed, delivery of goods/services occurs, significant evidence of an arrangement exists, and collectability is determined.

Proper revenue recognition is dictating the correct value of revenues, as with high-growth entities, revenues are often valued through multiple sources of total revenues, which lead to inflated revenues.

General Accepted Accounting Procedure (GAAP) dictates clients to provide for an estimation of the amount that is likely to be uncollectable revenue and provide an allowance for the same. However, estimation for this allowance might be problematic for auditors and client.

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Answer 2

Question

Chapter 7, Problem 1RC

To determine

Define revenue recognition and also, define the statement given by GAPP about proper revenue recognition.

Expert Solution & Answer

Explanation of Solution

Revenue Recognition:

Revenue recognition is the recording of revenues in the books of the company only when they are realized and earned. Revenues are considered to be earned when they are generated by entity’s revenue-earning activities.

On the other hand, revenues are realized when certain conditions are met. For instance, selling price is fixed, delivery of goods/services occurs, significant evidence of an arrangement exists, and collectability is determined.

Proper revenue recognition is dictating the correct value of revenues, as with high-growth entities, revenues are often valued through multiple sources of total revenues, which lead to inflated revenues.

General Accepted Accounting Procedure (GAAP) dictates clients to provide for an estimation of the amount that is likely to be uncollectable revenue and provide an allowance for the same. However, estimation for this allowance might be problematic for auditors and client.

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Answer 3

Question

Chapter 7, Problem 1RC

To determine

Define revenue recognition and also, define the statement given by GAPP about proper revenue recognition.

Expert Solution & Answer

Explanation of Solution

Revenue Recognition:

Revenue recognition is the recording of revenues in the books of the company only when they are realized and earned. Revenues are considered to be earned when they are generated by entity’s revenue-earning activities.

On the other hand, revenues are realized when certain conditions are met. For instance, selling price is fixed, delivery of goods/services occurs, significant evidence of an arrangement exists, and collectability is determined.

Proper revenue recognition is dictating the correct value of revenues, as with high-growth entities, revenues are often valued through multiple sources of total revenues, which lead to inflated revenues.

General Accepted Accounting Procedure (GAAP) dictates clients to provide for an estimation of the amount that is likely to be uncollectable revenue and provide an allowance for the same. However, estimation for this allowance might be problematic for auditors and client.

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Answer 4

Question

Chapter 7, Problem 1RC

To determine

Define revenue recognition and also, define the statement given by GAPP about proper revenue recognition.

Expert Solution & Answer

Explanation of Solution

Revenue Recognition:

Revenue recognition is the recording of revenues in the books of the company only when they are realized and earned. Revenues are considered to be earned when they are generated by entity’s revenue-earning activities.

On the other hand, revenues are realized when certain conditions are met. For instance, selling price is fixed, delivery of goods/services occurs, significant evidence of an arrangement exists, and collectability is determined.

Proper revenue recognition is dictating the correct value of revenues, as with high-growth entities, revenues are often valued through multiple sources of total revenues, which lead to inflated revenues.

General Accepted Accounting Procedure (GAAP) dictates clients to provide for an estimation of the amount that is likely to be uncollectable revenue and provide an allowance for the same. However, estimation for this allowance might be problematic for auditors and client.

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Answer 5

Chapter 7, Problem 1RC

To determine

Define revenue recognition and also, define the statement given by GAPP about proper revenue recognition.

Expert Solution & Answer

Explanation of Solution

Revenue Recognition:

Revenue recognition is the recording of revenues in the books of the company only when they are realized and earned. Revenues are considered to be earned when they are generated by entity’s revenue-earning activities.

On the other hand, revenues are realized when certain conditions are met. For instance, selling price is fixed, delivery of goods/services occurs, significant evidence of an arrangement exists, and collectability is determined.

Proper revenue recognition is dictating the correct value of revenues, as with high-growth entities, revenues are often valued through multiple sources of total revenues, which lead to inflated revenues.

General Accepted Accounting Procedure (GAAP) dictates clients to provide for an estimation of the amount that is likely to be uncollectable revenue and provide an allowance for the same. However, estimation for this allowance might be problematic for auditors and client.

Answer 6

Chapter 7, Problem 1RC

To determine

Define revenue recognition and also, define the statement given by GAPP about proper revenue recognition.

Expert Solution & Answer

Explanation of Solution

Revenue Recognition:

Revenue recognition is the recording of revenues in the books of the company only when they are realized and earned. Revenues are considered to be earned when they are generated by entity’s revenue-earning activities.

On the other hand, revenues are realized when certain conditions are met. For instance, selling price is fixed, delivery of goods/services occurs, significant evidence of an arrangement exists, and collectability is determined.

Proper revenue recognition is dictating the correct value of revenues, as with high-growth entities, revenues are often valued through multiple sources of total revenues, which lead to inflated revenues.

General Accepted Accounting Procedure (GAAP) dictates clients to provide for an estimation of the amount that is likely to be uncollectable revenue and provide an allowance for the same. However, estimation for this allowance might be problematic for auditors and client.

Answer 7

Chapter 7, Problem 1RC

To determine

Define revenue recognition and also, define the statement given by GAPP about proper revenue recognition.

Answer 8

Expert Solution & Answer

Explanation of Solution

Revenue Recognition:

Revenue recognition is the recording of revenues in the books of the company only when they are realized and earned. Revenues are considered to be earned when they are generated by entity’s revenue-earning activities.

On the other hand, revenues are realized when certain conditions are met. For instance, selling price is fixed, delivery of goods/services occurs, significant evidence of an arrangement exists, and collectability is determined.

Proper revenue recognition is dictating the correct value of revenues, as with high-growth entities, revenues are often valued through multiple sources of total revenues, which lead to inflated revenues.

General Accepted Accounting Procedure (GAAP) dictates clients to provide for an estimation of the amount that is likely to be uncollectable revenue and provide an allowance for the same. However, estimation for this allowance might be problematic for auditors and client.