Explain theoretically how the recognition of revenue on account (accounts receivable) affect the income statement compared to its effect on the statement of cash flows.
Statement of account:
The term statement of account refers to the presentation of a summary of a particular account along with all their relative transactions during a specific period such as income statement, cash flow statement and stockholder's equity.
Answer and Explanation: 1
Recognition of revenue is the method of reporting revenue earned by a company from sales or transactions, which is recognized when it made the...
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fromChapter 7 / Lesson 2
Revenue recognition states that revenue is recorded when it is realized, or realizable and earned, as opposed to received. Learn about the principles and process of revenue recognition with examples of recognition criteria before exploring some exceptions to the rule.