Generally Accepted Accounting Principles and Revenue Recognition

Briefly summarize the key facts you noted in your study of the five components of internal control and the rationale for the conclusions you made in the audit program concerning whether each component was adequately designed and implemented.

The conditions for this alternative are very similar to alternative #2 in the aspect that the only thing that has changed is the condition for the collectability. If we decide to recognize the partial revenue of $15,000 on October 4, 2015, when the customer pays the remaining $15,000, collectability is assured 100 percent because all the payment has been paid. In

8.  When is a buyer considered to have accepted performance regarding goods that are delivered pursuant to a contract?

g. On December 31, 2012, the company completed the work on a contract for an out-of-province company for $7,900 payable by the customer within 30 days. No cash has been collected and no journal entry has been made for this transaction.

A. ASC 605-25-30-2 states that an arrangement consideration shall be allocated at the inception of the arrangement to all deliverables on the basis of their relative selling price (the relative

Conditions that must be met for a transfer of receivables to be accounted for a sale are as follows:

The major benefit of this proposal is that agreement exists that there is more objectivity in measuring and determining changes in assets and liabilities than there is in measuring and determining the completion of the earning process. After taking comment letters on the discussion paper of December 2008 and an initial exposure draft in June of 2010, the boards issued a revision of the proposal in “Proposed Accounting Standards Update (Revised), Revenue Recognition (Topic 605) – Revenue from Contracts with Customers: Revision of Exposure Draft Issued June 24, 2010.” The new document left the basis of the proposal the same and added implementation guidance and a tentative date for adoption. Recognizing revenue under the standard would be a five-step

Jefferson Animal Rescue is a private not-for-profit clinic and shelter for abandoned domesticated animals, chiefly dogs and cats. At the end of 2011, the organization had the following account balances:

Student Cases with Solutions to accompany Accounting & Auditing Research: Tools & Strategies (7th edition)

For each of the specific contracts described in the case, please describe the best revenue recognition policy considering the criteria in SAB 101. (Onsetcom, Cataumet, Sandham, XLSemi, Technical Devices and Ashaban)

during the remainder of the contract year. See the example provided in Appendix A for an

• Customer may not agree to purchase until they can try it or the passage of time may define their

The case centers on actual events that occurred in the Roman Catholic Archdiocese of New Orleans from 2001 to 2009. In 2008, the archdiocese announced that it had lost more than $100 million as a result of Hurricane Katrina — because insurance failed to cover all its property losses. Those losses had no bearing on the parish a closure, the church says. Not all the faithful are convinced. Later released prospectus indicated that the Archdiocese paid over $10 million directly from its own assets to settle claims of sexual abuse, and these payments were not part of financial statement or notes. Due to unauthorized expenditure parishioners and media questioned about Good Counsel’s. Good Counsel’s parishioners were very

In section 5, the author hypothesizes that the accounts receivable accruals map into the cash flow realizations to a lesser extent than those under SOP 91-1. The author points out that the earlier the recognition, the more likely the customer is to not pay. Circumstances such as acceptance, commitment to pay and/or needs for customization may change prior to or upon delivery of the software or rendering of the service that may not be foreseen at the time of contract signing or earlier than as specified in SOP 91-1.

All products received must be documented and signed off by the receiving clerk with a matching purchase order to go along with the bill of lading or packing slip. No items should be received into inventory in the supply department without a corresponding approved purchase order. Supply department should receive a receiving report daily so they can arrange timely payment of invoices to take advantage of purchasing discounts. Nobody else should be allowed to remove a product fro inventory without providing a requisition. These processes should be implemented by the supply manager.