In this article we will discuss about Revenue:- 1. Meaning of Revenues 2. Concepts of Revenue 3. Activities. Meaning of Revenues: Revenues are earned from the sale of goods or services done by a business entity to the others. The business entity receives or will receive (in future) cash or something else of value. Generally cash is received immediately from [...]
In this article we will discuss about the realisation principle in revenue recognition. The realisation principle primarily determines the question of revenue recognition. Revenue recognised under the realisation principle is recorded at the amount received or expected to be received. The realisation principle requires that revenue be earned before it is recorded. This requirement usually causes no problems because the [...]
The following points highlight the four main adjustments to be made to determine revenue. The adjustments are: 1. Discounts 2. Sales Returns and Allowances 3. Bad Debts 4. Revenue Measurement in Non-Cash Transactions. Adjustment # 1. Discounts: Discounts may be generally of two types—trade discount and cash discount. Trade discounts are used in determining the invoice prices, i.e., actual selling [...]