Revenue Recognition and Measurement Homework Help

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What is revenue recognition?

 
Revenue recognition is an accounting principle. There are many accounting principles under the act of Generally Accepted Accounting Principles (GAAP) and revenue recognition is one of them. It helps to determine the condition under which the revenue needs to be identified or recognized. In our article for Revenue recognition and measurement homework help, the amount of revenue measurable can only be accounted. So ultimately revenue is supposed to be recorded when it is realized and not just earned.
 

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Example for revenue recognition

 
If Joseph goes to a candy store and pays for a candy by monopoly money despite of real cash. The shopkeeper is desperate to look good on papers, so she takes the monopoly money and register it as revenue. Here the revenue is generated on paper but in real life it is not recognized. The investors are protected from such frauds, because now many rules have been generated to avoid the fake revenue generations on papers.
 
Revenue recognition policy in Revenue recognition and measurement homework help article
 
In may 2014, the Financial Accounting Standards Board as our Revenue recognition and measurement homework help article writers abbreviate as FASB, issued accounting standard codification 606, to recognize revenues with contract. This actually cut through the system of fragmented policies created by industry specific guidance. Revenue recognition policies play a vital role to help the investors understand the financial statement of the firm.
 
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