Table of contents

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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which one of the following is NOT one of the five steps for recognizing revenue under the revenue recognition principle?

Determine the transaction price

Record cash receipts from customers

Identify the contract with a customer

Allocate the transaction price to performance obligations

Previous problemNext problem

Verified step by step guidance

Understand the revenue recognition principle, which is a framework for recognizing revenue in financial accounting. It ensures that revenue is recognized when it is earned and realizable, not necessarily when cash is received.

Learn the five steps of the revenue recognition process under the principle: (1) Identify the contract with a customer, (2) Identify the performance obligations in the contract, (3) Determine the transaction price, (4) Allocate the transaction price to the performance obligations, and (5) Recognize revenue when (or as) the entity satisfies a performance obligation.

Compare the options provided in the problem to the five steps of revenue recognition. The steps listed in the problem include: 'Determine the transaction price,' 'Identify the contract with a customer,' and 'Allocate the transaction price to performance obligations.' These are part of the five steps.

Analyze the option 'Record cash receipts from customers.' This is not part of the five steps for recognizing revenue under the revenue recognition principle. Recording cash receipts is a separate accounting activity related to cash flow, not revenue recognition.

Conclude that the correct answer is 'Record cash receipts from customers,' as it does not align with the five steps of the revenue recognition principle.