have serial numbers and all stamps have been paid for by the grocer) and record the amount as revenue. The expenses that are associated to customers redeeming goods should be recorded at the time revenue is recorded - according to the matching principle. Assuming the stamps have some sort of expiration time period, S&H should credit the revenue account when a certain stamp has expired and has of course been recorded in the past in the applicable liability account. An afterthought: I reckon
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Eye Vision Inc, a long-standing medical device manufacturer, has signed a contract to sell Holland Hospital the Clear View Laser and a two-year separately priced maintenance plan for $1 million and $0.2 million respectively. On a when-and-if available bais, Eye Vision Inc. will provide software updats that is embedded with the Laser to maintainance purchasor. The software has never been sold without Laser for its functional necessity. In this memo, as explained below, we conclude that: 1. Eye
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Assignment #3: Outsourcing Services • Question 1: Is the accounting policy proposed by OSI to defer costs associated with the origination of the agreement an appropriate policy? What advice would you give OSI regarding its policy election? Accounting policy proposed by OSI to defer costs is an appropriate policy. Cost should be deferred if they create or add value to an asset. In FASB Concept Statement No. 6, Par 25 states asset as “probable future economic benefits obtained or controlled
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cash basis accounting can look misleading for the company. The reason that cash basis is prohibited under generally accepted accounting principles, is that it doesn’t record revenue when it is earned, that violates the revenue recognition principle. Similarly it doesn’t record the expenses when they are incurred which in turn would violate the matching principle. In the end when comparing the differences of the two accounting types it’s easy to see why accrual basis accounting is the chosen method
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Explaining Basic Accounting Concepts and Business Structures Matthew Philip Moshi ACC/537 September 17, 2012 Joseph P McDonald Basic Accounting Concepts and Business Structures The catastrophic collapse of the stock market in 1929, subsequently resulting in the great depression will forever coincide with the private sector’s formulation and subsequent issue of formal accounting standards (Keiso, Warfield, & Weygandt, p. 6, 2007). Appeals for heightened governmental regulation over financial
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Accounting Assumptions, Principles, and Constraints | XACC 280 | Amy Croall | The Financial Accounting Standards Board (FASB) has expounded policies named the Generally Accepted Accounting Principles (GAAP). The rules were recognized to make monetary reports or “fiscal statements” beneficial to users. All monetary reports must cover comparable features so making choices is simpler. The features are “relevance, reliability, comparability and consistency” (Weygandt, Kimmel, & Kieso, 2008)
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Final Exam Review- Hitzig parts 1-3 1. Revenue Recognition: General: 25-1 The recognition of revenue and gains of an entity during a period involves consideration of the following two factors, with sometimes one and sometimes the other being the more important consideration: ← a. Being realized or realizable. Revenue and gains generally are not recognized until realized or realizable. Paragraph 83(a) of FASB Concepts Statement No. 5, Recognition and Measurement in Financial Statements
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misstatements or omissions in financial statements reduce the reliability of information contained in them. Matching Concept: Matching Principle requires that expenses incurred by an organization must be charged to the income statement in the accounting period in which the revenue, to which those expenses relate, is earned. Prior to the application of the matching principle, expenses were charged to the income statement in the accounting period in which they were paid irrespective of whether they relate
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1. Is the Power Starterpack a multiple-element arrangement? According to ASC 605-25-05-1, a multiple-element arrangement is one in which a company "will perform multiple revenue-generating activities." In such an arrangement, a company provides multiple products or services, usually under a single contract. Often, a company will "transfer [those] deliverables to the customer and performance may occur at different times or over different periods of time" (ASC 605-25-05-2). Given these complexities
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Accounting Theory Case Study 10.2 Accounting for frequent flyer points: fact or fiction ? Maylinda Irmayanti (023111146) Windy Ayu Wulandari (023111239) Case Study 10.2 Accounting for frequent flyer points: fact or fiction? Accounting requirements under IFRS have changed the way airlines account for frequent flyer points. In the past, the cost/provision approach accounting practices were used. Under this method, the upfront sale of points to bank, credit
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