Question

when a company recognizes revenue on the income statement, what it also recognize on its balance...

when a company recognizes revenue on the income statement, what it also recognize on its balance sheet?are there a number of possibilities?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

As per my understanding of the question it is based on the concept of Defered revenue.

As per accrual accounting a company will recognize revenue as earned only when the money is received from the buyer and goods or services is actually delivered or provided.

However a company accrues Defered revenue when the amount is received in advance but the good or service is to be provided at a future date. Because of this the Defered revenue will be shown as a liability in the balance sheet and when the service is actually provided or goods are delivered then the Defered revenue will be debited and revenue will be recognized in income statement.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1 determine when the seller should recognize revenue. 2. Explain your answer using GAAP revenue recognition...
1 determine when the seller should recognize revenue. 2. Explain your answer using GAAP revenue recognition guidelines. 3. Explain how each transaction would appear on the income statement and balance sheet for 2019. Your company is in the business of selling pickup trucks that average in price from $10,000 to $20,000. The owner of the company decides to purchase an antique sports car through the company for $200,000 for future sale. How would the antique car be treated at the...
(Subscription Revenue) -indicate it's Class (Asset, Liability, Equity, Revenue, Expense), Financial Statement (whether it belongs on...
(Subscription Revenue) -indicate it's Class (Asset, Liability, Equity, Revenue, Expense), Financial Statement (whether it belongs on the Income Statement or Balance Sheet), and its "Normal" balance (Credit or Debit) (Investment Income) - indicate it's Class (Asset, Liability, Equity, Revenue, Expense), Financial Statement (whether it belongs on the Income Statement or Balance Sheet), and its "Normal" balance (Credit or Debit) (RENT) - indicate it's Class (Asset, Liability, Equity, Revenue, Expense), Financial Statement (whether it belongs on the Income Statement or Balance...
The Income Statement, Balance Sheet and Statement of Cash Flows are integral elements when examining the...
The Income Statement, Balance Sheet and Statement of Cash Flows are integral elements when examining the strength or weakness of an organization. How would you explain the correlation between these statements and what specific areas would you focus on when making an assessment of a company?
Which method(s) of accounting recognize revenue when payments are received from the owner, and expenses when...
Which method(s) of accounting recognize revenue when payments are received from the owner, and expenses when bills are paid? Select one or more: a. Percentage of Completion b. Completed Contract c. Cash d. Accrual Which of the following are shown on the income statement? Select one or more: a. Liabilities b. Owner's Equity c. Equipment Costs d. Profit e. Overhead Which of the following are shown on the balance sheet? Select one or more: a. Construction costs b. Revenues c....
A limitation of the balance sheet that is not also a limitation of the income statement...
A limitation of the balance sheet that is not also a limitation of the income statement is Select one: a. None of these. b. the numbers are affected by the accounting methods employed c. the use of judgments and estimates d. omitted items e. valuation of items at historical cost
What is a balance sheet? What is an income statement?
What is a balance sheet? What is an income statement?
8a. When should a shipping company recognize revenue from its delivery service? a. On the date...
8a. When should a shipping company recognize revenue from its delivery service? a. On the date the customer places a order. b. On the date the customer’s packages are delivered. c. On the date the invoice is mailed to the customer. d. On the date the customer's payment is received. -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 8B. When is revenue from the sale of merchandise normally recognized? a. On the date the sale is made. b. On the date the customer pays for the merchandise....
1) Isaac Inc. began operations in January 2018. For certain of its property sales, Isaac recognizes...
1) Isaac Inc. began operations in January 2018. For certain of its property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2018, Isaac had $600 million in sales of this type. Scheduled collections for these sales are as follows: 2018                                                 $ 60 million 2019                                                 120 million 2020                                                 120 million 2021                                                 150 million 2022                                                ...
How to create a income statement and balance sheet to determine changes in assets, liabilities, and...
How to create a income statement and balance sheet to determine changes in assets, liabilities, and equity, total revenue and net income for a publicly traded company ( Apple)
New Vision Company completed its income statement and balance sheet and provided the following information: Service...
New Vision Company completed its income statement and balance sheet and provided the following information: Service Revenue $ 66,000 Expenses: Salaries and Wages $ 42,000 Depreciation 7,300 Utilities 6,000 Office 1,700 57,000 Net Income $ 9,000 Decrease in Accounts Receivable $ 12,000 Paid cash for equipment 5,000 Increase in Salaries and Wages Payable 9,000 Decrease in Accounts Payable 4,250 Present the operating activities section of the statement of cash flows for New Vision Company using the indirect method. (Amounts to...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT