at-what-point-does-revenue-recognition-occur-a-when-the-purchase-order-is-received-b-when-the-seller

Question

At what point does revenue recognition occur?
A. When the purchase order is received
B. When the seller receives the money for the job
C. When the seller has met “performance”
D. When the purchaser makes payment

Puneet Prajapati · Accepted Answer

Okay, So let&#x27;s understand. What is the meaning? Off own service revenue, okay. Or instead of instead of a new It is a mount which has been deceived by entity. But the saying is has not been performed yet. Okay, so first of all, let&#x27;s have an example. So that could be a bit more like to suppose we have excellent company. And there is a customer, Mr. Okay, so Miss P base among Mr B&#x27;s a moment. How much? That&#x27;s it. $15,000. Okay. $15,000. $15,000. However, the X and company has yet to perform these offices. Therefore, $15,000 will become this. A visit of a new after excellent company will perform services for mr Here on dealer, unless the $15,000 will be considered as right on our own. So the visit of any Okay, so the correct choice. So the correct choice Forgiven problem 35 is a what? It says that the company receives the treatment or amount the company to CST cash from a customer before performing the service. So before performing the service meat this out. So it has been deceived by accent company. That is right. It could be done less. Understand, mister. Okay, so that&#x27;s all for the solution. Thank you.

Puneet Prajapati · Answer

Okay, so let&#x27;s start on a solution, Okay? But don&#x27;t No, no. The basis to outdo the right solution must depart. We will understand diamond or something. Okay, that will guide us throughout the accounting subject. That how to party financial transaction in the books of a concert. Okay, these rules are very straightforward. So there&#x27;s no Oliver. There is no logic behind it. However, these other tradition matters, but diamonds of accounting have been just invented. Right? Let&#x27;s if I just accessible. Okay. So when am so there are five type overcomes and for all of fight them. Okay, B leaving the guard. The general increase Africans in financial transactions in the books of the gums for ring by diamond roots up. Okay, so let&#x27;s say the F five never comes. First of all, a sex and expenses and whenever they will be an increase in a second expenses, they will be corresponding debit to those accounts which which would be considered it, which will be considered as a sex our expenses. However, if there will be a decreasing a sex and expenses, then there will be credit. Do those who comes. Okay. Is that you? There is no logic behind this. These are just that traditional terms like like mice that there is no alternative definition to gravity. That why it has been invented. Okay, so that is similar. Like the diamond. Lots of a country. Okay, Now, let me give you the second dinner. Only clue was, however, there are forced four rules, actually. Look, but we need to remember all of this. Otherwise, what will happen before the exams? We will not be able to devise name properly. Also, along with that, you have to write it down in your notebooks. What? Okay, so this this is credit decrease in liabilities of a new capital. Okay, well here, David. So these are the five type of accounts we do have. Okay. First capital revenue liabilities, a sex on expenses. Okay. No, what happens whenever we talk about the remaining? What is the revenue like to suppose we are in the business of selling? Video games are fours and beverages to our customers. Okay. Now, whenever we will see some goods or services to our customer, then the village and bread the revenue from those customers so our revenue will be mostly comprised or reconsider. Revenue will consist off sales plus other didn&#x27;t go. Oh, yeah, but they didn&#x27;t go. I will not be considered as a revenue. But still, I am reading it because you will face this this town simulator problems, Howard, this is the main revenue originate from our customers. So what we have, as per the rules, whenever there will be an increase in the revenue that will be presented by a corresponding credit revenue. Okay. Now what happens? Which of these transactions as Pacific Ocean? Which of these transaction requires a credit and burrito? I live in you. Okay, so the correct choice, the characters for for problem 38 from problem 38 is a by that. So because what is happening? The gash is coming to us. Okay, so if cash is coming to us, then cashes in closing. Okay? So there will be a David too. However, we are selling, we are performing. The service is against the received off the menu. So there is also increasing revenue. I got it. If there is also increasing that we knew then what is that? What is a way of representation toe to reflect increasing revenue. It&#x27;s a credit. So that is right. We generally don&#x27;t write the revenue if we ever received their If you receive the cash in the against the revenue, we generally light says that. Okay, so this is the This is the general NT. You need to like everything. What African on both of these years in your notebooks. So that you will be able to understand what? That what I have bean to derive the solution. Okay. So different solution of this one. How, however appropriate solution to the problem is this one. Okay, so we will be Well, get out or to give a credit. Do sales sales account like us denizen. Reason revenue. Okay, as of now, for every problem in the country, you will get help from the diamond itself. Accounting. Okay, So please make sure that you will realize them all of the rules before your example before anything but you will face in the future. Okay, That&#x27;s all for the solution. Thank you.

Puneet Prajapati · Answer

Okay, so having you recognition on sale. Yeah, it have you boots, then groups are services have been Yeah, introspective. Oh, I see against the Okay, so we have a deep have been your combination. Okay. What? It sees that that would make it live in the woods services have bean deliver. Okay, irrespective of this, you know, pavement against the. So let&#x27;s understand this to an example. Let&#x27;s support this, Mr Reed. Okay. Business order. And there is Mr C. Who is that estimate? So, Mr Mystery, his transfer is selling books off. That&#x27;s $100. So Mr C said Cruz said in the diving pay $100. So this is a basically pregnancy come back to haunt. So this is exactly maybe we know the ignition concept, Understand? So this is a better team. The sale has been made on the basis. Now what efforts? They have ended up a commission conservancies or they believe recognition concepts is that Mr A Is is likely due. All right, is surely the card the credit sale off $100 in his book. Several problems, irrespective off immediate cash payment from Mr C or more. Okay. Even if the payment will be received in subsequent years. Also, Mr A Wilby library record this same, okay. Or this amount. And it&#x27;s saying or this amount the current, even if the payment will be deceiving subsequent and that this one of the principal. Okay, so we have a new recognition is also on the gap. Okay. That says that even if the payment will be received in subsequent years, Okay, the sale will be recognized then that would with just Okay, So our solution matches choice. See that received the cash off. Kashmir isn&#x27;t RD right yet? Okay, so you can write on your notebooks for accidents apart here. However, Joy sees the correct answer. That&#x27;s all for our submission and you.

Puneet Prajapati · Answer

Okay, so let&#x27;s understand that how many times off but gazing mediums we have, like So how many mediums weekend initiate our chasing down their chins off its okay, All right. But it is not on either arm hits and unite both goods and services. Okay, so first up on begin. But she is any type off religion services on a cash basis, then on this is okay. So in terms off gas bases, there is a chimney production that, first of all, they will be delivery aubergines offices against Yes. Okay. Against cash. So that is what we have. Like, this is purchasing media ve vill or business. Incredible. Deliver emergency services to the customer and the customer will pay cash against the ability. Okay. I don&#x27;t think this is what happens. Then there is a delivery of goods and services. Okay. That is delivery of goods and services, Turkistan, the customer stays. I will make a mental. You&#x27;re depending that okay? Like it is also known expertise on traffic. Okay, But what happens when customer find something defective in the goods or services? Because the mother turns the Gordon&#x27;s up in this study supplier before making the payment know what happens if, if the actual purchase has been made has been made on it. Okay. A If the customer also turns the defective goods to the supplier, then what happened to accounts empty effected from those damages. Okay for partying most of all there decades ago. Okay. And 2nd 1 is sees you doing and launches. Okay. Why did this about? Because the purchase or sale has been made on credit. So that is why we will have effect contact as they come. And we will have effect on sales returning about launches because account 40 translate chin into stepped off, return off. Good return off defective fortunes of his sister supplier rebuild. They will be effect on sales. Ritalin allowances. Okay. No, As the current solution to our question here, I didn&#x27;t be fired that Joyce D is correct. Okay, because that Joyce is containing who? Two important accounts that will be affected. Yes. The purchase will you meet don&#x27;t credit for so far, and that defective goods really be returned by customers for the suppliers. Okay, so you can write down. But I have returned so far, okay? For making for making the concept to get our choice to use the correct answer. Thank you.

Mihir Nayar · Answer

everyone today will be going through Problem number 14 from Chapter 17 of the textbook, which asked one. Do firms received money from a stock sale in the firm? And when do they not receive money? So, um, this is literally out of our reading from Chapter 17 dissection, and it gives us our answer in a very direct manner, which is nice. So in green, I&#x27;m going to highlight when they do receive money and Leningrad, I&#x27;ll highlight and right off the bat. It says a firm received money from the stock sale on Lee. When the company sells its stock to the public, which includes individuals, mutual funds, insurance companies and pension funds. We call a firm&#x27;s first stock sale to the public an initial public offering. Our I P o. Um, this is important for a few reasons. Um, the I, P O. And any stock issue there, after such as stock held as Treasury stock or new stock issued leaders, a secondary offering provides the funds to repay, um, early stage investors. That&#x27;s super important. Um, and then also it&#x27;s important that it provides the established companies financial capital for substantially expanding its operations. But this um Onley happens the select amount of times so this is limited in nature. Um and then it says, however, just never a good time. But it says most of the time, when one buys and sells corporate stock, the firm receives no financial return at all. So don&#x27;t they? Don&#x27;t even receive any money, all so to answer the question directly. One. Do firms receive money from a stock sale in their firm? You could say only select amount of times when they sell its their own stock to the public. Um, and then you could specify a problem looking. It&#x27;s individuals, mutual funds, insurance companies and pension funds. And then when do they not receive money? Most of the time. And then the rationale for why it&#x27;s most of the time is that, um, like it says, um, when you buy stock shares, you are buying a small slice of the firm&#x27;s ownership from the existing owner on the firm that originally issued the stock is not a part of this transaction, so that&#x27;s kind of the rational. By most of the time, you do not receive money from a stock sale, so very hot it if you guys enjoy this video exploration, please of the light. But next to it, I hope you&#x27;ll have a nice day. And thank you for watching.

Problem 19 Easy Difficulty

At what point does revenue recognition occur?
A. When the purchase order is received
B. When the seller receives the money for the job
C. When the seller has met “performance”
D. When the purchaser makes payment

Answer

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Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting

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Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon CooperPrinciples of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting