0
What guidelines might the GAAP have for revenue recognition and expense reporting?
Wiki User
∙ 14y ago
According to Generally Accepted Accounting Principles (GAAP), revenue should be recognized when the four criteria are met:
- Performance has occured.
- The amount of revenue can be reasonably measured.
- The cost required to earn the revenue can be reasonably measured.
- Collection of payment is reasonably assured.
* In class our prof taught us an acronym to help us remember it:
CRAP - cost is measurable; revuenue is measurable, assurance of collection; performance has occured.
In terms of expense reporting, following the matching principle, expenses should be recorded/reported in the same period as the revenue it helped to earn.
Wiki User
∙ 14y ago
Add your answer:
Earn +20 pts
The accounting principle that requires revenue to be reported when earned is the?
revenue recognition
Is sales revenue an expense or asset?
Sales is a revenue not an expense or asset while difference between sales and expense is profit which is liability for business.
The revenue recognition principle dictates that revenue should be recognized in the accounting records?
The revenue recognition principle dictates that revenue should be recognized in the accounting records when it is earned.
When Adjusting entries are required?
Adjusting entries are required to implement the accrual accounting model. Because accruals involve recognition of expense or revenue before cash flow.
What is between revenue and expenditure?
revenue is income and expenditure is an expense
The accounting principle that requires revenue to be reported when earned is the?
revenue recognition
The entry closing the Expense and Revenue Summary is a?
The entry closing the Expense and Revenue Summary is a?
Is sales revenue an expense or asset?
Sales is a revenue not an expense or asset while difference between sales and expense is profit which is liability for business.
The revenue recognition principle dictates that revenue should be recognized in the accounting records?
The revenue recognition principle dictates that revenue should be recognized in the accounting records when it is earned.
When Adjusting entries are required?
Adjusting entries are required to implement the accrual accounting model. Because accruals involve recognition of expense or revenue before cash flow.
What is between revenue and expenditure?
revenue is income and expenditure is an expense
Adjusting entries are required when because?
Adjusting entries are required to implement the accrual accounting model. Because accruals involve recognition of expense or revenue before cash flow.
What kind of expense is rent expense?
Rent expense is a Revenue expense and not a capital expense. It is a revenue expense because it recurs from year to year and is not an expense in purchasing a fixed asset. It is classified as a revenue expense also because it features in the income statement of each year and following the principle of accruals, the accountant must, make the necessary end of period adjustments to make sure that the the amount of rent expense that should have paid is charged against revenue and not just the actual cash paid.
Whats the antonym for revenue?
Expense.
Is Commission a revenue or an expense?
if Commission is received then it is revenue but if commission is paid then it is expense, if commission is receivable then it is asset while if it is payable then it is liability.
The revenue recognition concept?
The revenue recognition concept is commonly used in accrual form of accounting. This indicates revenue should only be recorded when and entity is completed to a substantial level.
Why is revenue recognized at the time of sale?
It is the basic rule of revenue recognition that unless and untill goods are not transferred to the customers revenue cannot be recognized and internation accounting standard number 2 deals in revenue recognition.
