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Intermediate Accounting For Dummies by Maire Loughran

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Chapter 20

Is That You, Revenue? Revenue Recognition Concepts

In This Chapter

arrow Recognizing the different methods of revenue

arrow Understanding revenue recognition before completion

arrow Exploring methods of recognition after completion

arrow Highlighting franchise sales

arrow Disclosing revenue on the notes to the financial statements

Time to go over some basic concepts of revenue recognition. What is revenue? How do companies record it? Revenue is recognized only when it is earned and realizable. This chapter looks at what those two terms mean and also explores revenue that is recognized at point-of-sale, both before and after delivery.

I also explain the two methods to account for long-term contracts under Accounting Standards Codification (ASC) 605-35. In addition, I help you determine what to do accounting-wise when customers return (or have the right to return) their purchases. Finally, to wrap up revenue into a tidy package, I introduce franchise sales and revenue disclosure notes to the financial ...

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