BU127 Lecture Notes - Lecture 8: Interest Rate

• School: WLU
• Department: Business
• Course: BU127
• Professor: Chialin Chen

Document Summary

Bu127 chapter 7 reporting and interpreting sales revenue, receivables, and cash. The revenue principle requires that revenue be recorded when earned. The entity has transferred to the buyer the significant risks and rewards of ownership. Entity retains neither continuing managerial involvement nor effective control. The amount of revenue can be measured reliably. It is probably that economic benefits will flow to the entity. Fob shipping point revenue is recognized at shipping (sale when shipped) Fob destination point revenue is recognized at delivery (sale when arrives) For service companies, revenue is recognized when services are provided. Companies accept credit cards to: increase sales, avoid providing credit directly to customers, avoid losses due to bad cheques, avoid losses due to fraudulent credit card sales, receive payment quicker. When credit card sales are made, company must the pay credit card company a fee for service provided.