Various types of revenue are earned as time passes rather than through a physical event such as the sale of inventory. To illustrate, assume that a customer comes to the Lawndale Company five days before the end of the year and asks for assistance. The customer must be away for the next thirty days and wants company employees to feed, water, and care for his horses during the period of absence. Everything needed for the job is available at the customer’s farm; Lawndale just has to provide the service. The parties agree that the company will receive $100 per day for this work with payment to be made upon the person’s return. No asset changes hands at the start of this task. Thus, the company’s accounting system is not likely to make any entry until payment is eventually received. However, assume that after the first five days of work, the company is ready to prepare financial statements and needs to recognize all revenue earned to date. The service to this customer has been carried out for five days at a rate of $100 per day. The company has performed the work to earn $500, an amount that will not be received until later. This receivable and revenue should be recognized through an adjusting entry so that the reported financial figures are fairly presented. The earning process for the $500 occurred this year and should be recorded in this year
payday loans kansas city wornall
cash loans las vegas no credit check
cash loans las vegas no credit check
payday loan license oklahoma
south carolina payday loan laws
cash loan Chesapeake
no fuss payday loans
cash loan dallas
pay day
payday loan lenders indiana
registration loans online phoenix az
what is cash advance
payday loans delhi ohio
payday loans in dellwood mo
payday loans jackson ky
ez payday loan colorado springs
fast cash direct
cash 1 payday loan phoenix az
payday loan nampa idaho
cash loans davenport iowa
loans for bad credit in california
online money loans
online loans in one hour
payday loan in san francisco
cash loans in newport ky
american payday loan
payday loan bad credit
apply for loan
20 minute payday
flexible loans for bad credit
No recognition is needed for cost of goods sold. Inventory is not being sold but rather is a service. The $500 receivable will be removed in the subsequent period when the customer eventually pays the company for the services rendered. Question: As discussed in an earlier chapter, the revenue realization principle (within accrual accounting) provides formal guidance for the timing of revenue reporting. It states in part that the earning process must be substantially complete before revenue can be recognized. That seems reasonable. In the above example, the work has only been performed for five days out of a total of thirty. That is not substantially complete. Why is any accrued revenue recognized if the earning process is not substantially complete? Answer: This question draws attention to a difficult problem that accountants face frequently in creating a fair portrait of a company. The proper recognition of revenue is one of the most challenging tasks encountered in financial accounting. Here, the simplest way to resolve this issue is to consider the nature of the task to be performed.
best online loan yahoo
payday loans fredericktown mo
payday loan colorado springs
instant cash loans online no credit check
fast bad credit loans no fees
payday loan help wisconsin
payday loan in san antonio
restoring credit
payday loans hawaii honokaa
fast cash online free
payday loan spencer ia
payday loans online los angeles
payday loan in new mexico
payday loan harrisonville mo
quick cash las vegas nevada
quick loans virginia
no fax payday loans direct lenders
payday loan greenwood indiana
immediate cash loans
fast money loan bad credit



Payday Loans

© 2015 All rights reserved.

Make a free websiteWebnode