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Financial Accounting Course |
| U.S. GAAP Codification | Accounting Topics |
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Revenue Accounts 01 Examples and Practice Questions |
| U.S. GAAP Codification, Accounting by Topic, Accounting Terms |
| Financial Accounting, Intermediate Accounting, Advanced Accounting |
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Revenue Accounts 01 Examples and Practice Questions Revenue 1. Revenue is the increase in resources from the operations of an entity 2. Increase in resources may be (A), (B) or (C) (A) Increase in assets (B) Decrease in liabilities (C) Both (A) and (B) Recognition of revenue 1. Recognition means "recording" in accounting 2. Revenue is reported when it is recognized 3. Revenue is recognized when it is earned and realized (or realizable) 4. Realized means the collection of cash 5. Earned means the delivery of products or services Debits and credits 1. Revenue accounts have normal balances on the credit side 2. Increases in revenue accounts are recorded on the credit side 3. Decrease in revenue accounts are recorded on the debit side |
Examples of revenue accounts
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Practice Questions 1. On December 15, 2010 Entity A sold 300 units of products at the price of $20 per unit 2. On December 15, 2010 Entity A received $3,600 in cash 3. On January 27, 2011 Entity A received $2,400 in cash 4. What is the amount revenue for 2010? 300 units x $20 = $6,000 5. What is the balance of accounts receivable at December 31, 2010? $6,000 - $3,600 = $2,400 6. Prepare journal entries at the following dates (1) December 15, 2010 (2) December 31, 2010 (3) January 27, 2011 7. Journal entry at December 15, 2010
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Codification Topics at the 100 Level |
| Topic 105: Generally Accepted Accounting Principles |
| U.S. GAAP by Topic |
| Accounting Topics |
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