BUS 251 Lecture Notes - Lecture 4: Revenue Recognition, Net Income, Income Statement

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 251
• Professor: Susan Bubra

Document Summary

Week 4 ch4: revenue recognition, general criteria: a. i. When it is probable economic benefit will flow to the company (when you perform the service, or goods delivered) a. ii. When the amount can be measured: specific criteria: b. i. Sale of goods: answer for each point b. i. 1. Risks and rewards of ownership have been transferred to the buyer b. i. 2. b. i. 3. b. i. 4. b. i. 5. Seller has no continuing involvement or control over the goods. Economic benefits from the transaction flow to the seller. Amount can be reliably measured (you can issue the bill, say for hours) b. ii. 2. Economic benefits from the transaction flow to the seller b. ii. 3. Portion of total services completed can be reliably measured. b. iii. Receipt of interest, royalties and dividends. (no questions) b. iii. 1. Amount of revenue can be reliably measured b. iii. 2. It is probable that the economic benefits from the transaction flow to the company: revenue measurement: c. i.