Table of contents

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1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Revenue Recognition and Expense Recognition

Financial Accounting

3. Accrual Accounting Concepts

Revenue Recognition and Expense Recognition

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Multiple Choice

In which of the following situations would a merchandiser record revenue?

When a customer places an order but before goods are shipped

When payment is received in advance but goods have not yet been delivered

When goods are delivered to a customer and the sale is finalized

When inventory is purchased from a supplier

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Verified step by step guidance

Understand the revenue recognition principle: Revenue is recognized when it is earned and realizable, meaning the goods or services have been delivered and the payment is assured.

Analyze the first scenario: When a customer places an order but before goods are shipped, revenue is not recognized because the goods have not been delivered yet.

Analyze the second scenario: When payment is received in advance but goods have not yet been delivered, revenue is not recognized because the delivery of goods or services has not occurred.

Analyze the third scenario: When goods are delivered to a customer and the sale is finalized, revenue is recognized because the performance obligation has been satisfied and the sale is complete.

Analyze the fourth scenario: When inventory is purchased from a supplier, this is not a revenue-generating activity but rather an expense or asset acquisition, so revenue is not recorded.