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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Give an example and explanation for each of the following differences between when revenues are recognized and cash flows are received: recognition simultaneous with receipt; recognition prior to receipt; and recognition after receipt.

To determine

Explain with example for given differences between when revenues are recognized and cash flows are received; recognition simultaneous with receipt; recognition prior to receipt; and recognition after receipt.

Explanation

Cash sales are an example of revenue and cash receipts received simultaneously. In cash sales transaction, goods or services are outflows and cash inflows.

Credit sales are an example of revenue recognition prior to receipt. In a credit sales transaction, goods or services are sold on credit...

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