a. In your own words, define revenues. Explain how revenues are different from gains. b....
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Accounting
a. In your own words, define revenues. Explain how revenues are different from gains.
b. Describe what it means for a business to recognize revenues. What specific accounts and financial statements are affected by the process of revenue recognition? Describe the revenue recognition criteria outline in the FASBs Statement of Concepts No. 5.
c. Refer to the Revenue Recognition discussion in Note 1. In general, when does Apple recognize revenue? Explain Apples four revenue recognition criteria. Do they appear to be aligned with the revenue recognition criteria you described in part b, above?
d. What are multiple-element contracts and why do they pose revenue recognition problems for companies?
e. In general, what incentives do managers have to make self-serving revenue recognition choices?
f. Refer to Apples revenue recognition footnote. In particular, when does the company recognize revenue for the following types of sales?
i. iTunes songs sold online.
ii. Mac-branded accessories such as headphones, power adaptors, and backpacks sold in the Apple stores. What if the accessories are sold online?
iii. iPods sold to a third-party reseller in India
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