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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]
The accounting for long term contracts using the percentage of completion method is an exception to the basic realization principle. This method is used wherein the revenues are determined based on the costs incurred so far. The percentage of completion method is used when: Collections are assured; The accounting system can: Estimate profitability
If, on the other hand, the corporation receiving the dividend owns more than 80 percent of the distributing corporation, it is allowed to deduct 100 percent of the dividend it receives. [ 5 ] Note that in order for the deduction to apply, the corporation paying the dividend must also be liable for tax ( i.e. , it must be subject to the double ...
An investment normally counts as a cash equivalent when it has a short maturity period of 90 days or less, and can be included in the cash and cash equivalents balance from the date of acquisition when it carries an insignificant risk of changes in the asset value. If it has a maturity of more than 90 days, it is not considered a cash equivalent.
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...
This rule, called FAS 157-e, permits banks to Well, the waiting is over. Tomorrow a group of accountants will vote on a new accounting rule that will end the financial crisis.
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.
Generally Accepted Accounting Principles (GAAP) [a] is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC), [1] and is the default accounting standard used by companies based in the United States.