The five basic steps in revenue recognition.

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Chapter 8, Problem 8.4Q

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To explain: The five basic steps in revenue recognition.

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Cash Accounts Receivable Supplies Prepaid Insurance Equipment Notes Payable Accounts Payable The Lexington Group Unadjusted Trial Balance May 31, 2016 Debit Balances Credit Balances 20,350 37,000 1,100 200 171,175 36,000 26,000 Common Stock 50,000 Retained Earnings 94,150 Dividends 15,000 Fees Earned 429,850 Wages Expense 270,000 Rent Expense 63,000 Advertising Expense 25,200 Miscellaneous Expense 5,100 608,125 636,000

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