Methods of Revenue Recognition homework Help

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What is revenue recognition?

To identify the revenue only when it is in the hands of business and not when it is just assumed is called as revenue recognition. It is not an easy task as recording a sale when it is done. As per GAAP, once the firm starts using the revenue recognition principle they should continue to do so. The various steps and methods that are adopted for revenue recognition are shown in this Methods of Revenue Recognition homework Help article.
 

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Methods of Revenue Recognition

 
1. Sales basis method: in this method, as our Methods of Revenue Recognition homework Help article writers suggest, the revenue is recorded at the time of sale of the product. The product should be delivered to the consumer to be considered.
 
2. Percentage of completion method: majorly used in long term projects, this method shown in our Methods of Revenue Recognition homework Help article provides generation of revenue even though the projects are not completed.
 
3. Completed contract method: once the project has been concluded, the revenue is generated for the task. This method is for both revenues and expenses and is used when the percentage of work completion is unable to satisfy the requirements.
 
4. Cost recoverability method: unless and until all the project costs are accounted for, the revenue is not considered to be generated by the task.
 
5. Installment method: this method is opted for the firm whose customers are not able to pay their debts on time and they pay it in installments. The revenue is recorded only after the installments have been received.
 
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