In this video, learn how to evaluate the revenue recognition criteria and how they are applied. Revenue is the starting point of the income statement.
- When does a sale get reported in the books? … Let's use a real company example to illustrate … the surprising complexity of this question. … When Apple sells a person an iPhone, … Apple is actually selling a bundle … of three different things. … First, there's the iPhone itself. … Second, with respect to iPhone sales, … Apple states that it may, from time to time, … provide future unspecified software upgrades … and features free of charge to customers. … Third, Apple provides what it calls … undelivered non-software services, … which are extended warranty services … on the hardware device itself. … When a customer pays, say $600 to Apple … for an iPhone, that customer is buying … a bundle of goods and services. … And some of those services won't be delivered … for several years. … The accounting question, … the revenue recognition question, is this. … When should Apple report the $600 sale? … Right now, spread out evenly over some years … in the future, some now and some spread out …
- Describe line items that appear on financial statements.
- Differentiate between the three types of financial statements.
- Interpret current accounting issues and trends.
- Calculate the market capitalization of a company.
- Identify the most important expense for a retail company.
- Explain the use of common size financial statements.
Skill Level Beginner
Accounting Foundations: Internal Controlswith Kay Stice1h 46m Intermediate
Cost Accounting: Analyzing Product Profitabilitywith Rudolph Rosenberg56m 49s Intermediate
Why financial accounting?1m 13s
1. Accounting Basics
The accounting equation3m 37s
2. The Financial Statement
3. The Mechanics of Accounting
4. Current Issues in Financial Accounting
5. Financial Statement Analysis
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