Revenue Recognition Standard Accounting

A business expects to receive consideration for the sale of goods to its customers. Since accounting periods are for a defined time period a process is needed to allocate the correct amount of consideration to the correct period. This process is referred to as revenue recognition and is applied using a five step revenue model.

Revenue Recognition Standard Accounting January 18th, 2018Team
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Net Purchases in Accounting

Net purchases is equal to the gross purchases of goods from suppliers less the amount of purchase returns, allowances, and discounts. To arrive at the total cost of goods purchased the business needs to add the cost of freight-in needed to deliver the goods to their present location and condition ready for sale to customers.

Net Purchases in Accounting January 9th, 2018Team
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Unbalanced Trial Balance Errors

A trial balance will not balance if there are errors in the double entry bookkeeping system, To help find and correct the unbalanced trial balance a number of different shortcut techniques can be applied.

Unbalanced Trial Balance Errors December 7th, 2017Team
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Direct Method Cash Flow Statement

The cash flow from operating activities for a business can be presented using either the statement of cash flows direct method or alternatively the indirect cash flow statement. The direct method cash flow shows gross cash receipts and payments whereas the indirect method cash flow shows net income and adjusts this for balance sheet movements.

Direct Method Cash Flow Statement October 17th, 2017Team
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Predetermined Overhead Rate

A business calculates a predetermined overhead rate based on estimated overhead and activity levels in order to be able to apply overhead to its product costs.

Predetermined Overhead Rate October 9th, 2017Team
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Currency Forward Contract – Imports

When a business undertakes import trade with overseas suppliers and makes payment in a foreign currency it needs to try and protect itself from fluctuations in the currency exchange rate. One method of achieving this is to buy the foreign currency using a currency forward contract.

Currency Forward Contract – Imports October 6th, 2017Team
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Incremental Analysis Approach

Make or buy, sell or process further, keep or drop, accept or reject a special order, and repair or replace are all examples of decisions which can made using the incremental analysis approach. The technique considers only relevant costs when a business needs to make a choice between alternative options.

Incremental Analysis Approach October 2nd, 2017Team
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Foreign Exchange Forward Contract Accounting

When a business undertakes export trade with overseas customers and receives payment in a foreign currency it needs to try and protect itself from fluctuations in the exchange rate. One method of achieving this is to sell the foreign currency using a foreign exchange forward contract.

Foreign Exchange Forward Contract Accounting October 5th, 2017Team
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Stock Option Compensation Accounting

Stock options are a form of equity based compensation. When a business purchases the services of key personnel and pays for those services using stock options, it must record the expense in the income statement over the vesting period using stock based compensation accounting journal entries.

Stock Option Compensation Accounting August 30th, 2017Team
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Capitalized Interest Cost

Capitalized borrowing costs are those added to the cost of acquiring an asset to bring it to the condition and location necessary for its intended use.

Capitalized Interest Cost November 13th, 2017Team
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Relative Fair Value Method

When a business purchases an asset which includes several assets such as land, land improvements, and buildings which have dissimilar depreciation rates, it needs to be able to allocate the total cost of the asset to its component parts. The relative fair market value method is one technique used to carry out this allocation.

Relative Fair Value Method August 9th, 2017Team
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