0
What is a delay of recognition of an expense already paid or of a revenue already received is?
Wiki User
∙ 9y ago
Delay of recognition is an accounting term that refers to the practice of delaying the reporting of an expense or revenue until a later reporting period.
The accounting industry has developed certain standard and acceptable accounting practices that businesses should follow. Under an audit, the accountant can determine whether the company is following the standards, or is using misleading accounting practices, in violation of the standards.
According to an alert issued by the AICPA, (American Institute of Certified Public Accountants) "A substantial portion of litigation against accounting firms and a number of SEC Accounting and Auditing Enforcement Releases involve revenue recognition issues. Many of these issues result from alleged improper accounting treatment of sales recorded in the ordinary course of a client's business. Such improper accounting treatment ranges from allegedly stretching the accounting rules to falsifying sales in an effort to manage earnings."
While there can be an accepted use of this practice, the manager has to be very careful to follow the proper standards when he decides when to use the delay method.
Wiki User
∙ 9y ago
Add your answer:
Earn +20 pts
Is depreciation a liability?
Depreciation is not a liability rather it is an expense and it is that part of full cost of fixed asset upto which company has utilized that asset in revenue generation in one specific fiscal year and as benefit is already taken and cash already paid it is expense rather then liability which deals with future.
What is the definitionof revenue recognition?
Revenue recognition is including inflows in financial statement when all when ownership and control has been passed to another person and that inflows is probable based on a transaction
The recording of an expense could result in a corresponding increase in?
revenue
Is commission received a revenue?
It is a source of income/revenue.
What is A temporary account used in closing revenue and expense accounts called?
The answer is income summary.
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.
when an amount already recognized as revenue becomes uncollectible, it is recognized as an expense.?
No.
What term is used to describe an expense that has not been paid or a revenue that has not been received?
Outstanding
The revenue recognition principle dictates that companies recognize revenue in the period in which it was received rather than when it was earned- True or False?
false
The revenue recognition concept states that revenue should be recorded in the same period as the cash is received?
False Because it determines when revenue is credited to a revenue account. Cash method means the transaction is reported when cash is received, but the revenue recognition concept means a transaction is reported as a sale even if no money has been paid. Cash basis does not recognize payable or receivable accounts.
The entry closing the Expense and Revenue Summary is a?
The entry closing the Expense and Revenue Summary is a?
What is full accrual accounting?
Accrual accounting is a system which recognizes revenue or expense when it is earned or incurred but not when it is paid or received.
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 practice is when letting the expense follow the revenue?
This is the Accrual basis accounting method, which uses the matching principle (expenses following revenue) to record expenses when they are incurred, and revenue when it is earned (not on the date when cash is received or paid out).
What is realisation concept in financial accounting?
Realization concept is also known as Revenue recognition concept. Under this concept revenue is said to be recognized by the seller when it is earned irrespective of cash received or not.
