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In accounting, the revenue recognition principle states that revenues are earned and recognized when they are realized or realizable, no matter when cash is received. It is a cornerstone of accrual accounting together with the matching principle. Together, they determine the accounting period in which revenues and expenses are recognized. [1]
Accounts receivable represents money owed by entities to the firm on the sale of products or services on credit. In most business entities, accounts receivable is typically executed by generating an invoice and either mailing or electronically delivering it to the customer, who, in turn, must pay it within an established timeframe, called credit terms [citation needed] or payment terms.
In computer programming and software engineering, the ninety-ninety rule is a humorous aphorism that states: The first 90 percent of the code accounts for the first 90 percent of the development time. The remaining 10 percent of the code accounts for the other 90 percent of the development time. [1] [2] —
Robert Kiyosaki, financial guru and author of the bestselling book, "Rich Dad Poor Dad," talks and writes a fair amount about a concept he calls the 90/10 rule. According to Kiyosaki, the rule...
These include single-rule methods and variable size rule methods. [14] Single rule methods: 5% of pre-tax income; 0.5% of total assets; 1% of equity; 1% of total revenue. "Sliding scale" or variable-size methods: 2% to 5% of gross profit if less than $20,000; 1% to 2% of gross profit, if gross profit is more than $20,000 but less than $1,000,000;
In accrual accounting, the matching principle dictates that an expense should be reported in the same period as the corresponding revenue is earned. The revenue recognition principle states that revenues should be recorded in the period in which they are earned, regardless of when the cash is transferred.
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Accounting practices in the mortgage banking industry full-text: 1974 December 30 75-1: Revenue recognition when right of return exists full-text: 1975 75-2: Accounting practices of real estate investment trusts full-text: 1975 June 27 75-3: Accrual of revenues and expenditures by state and local governmental units full-text: 1975 July 31 75-4