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Revenue Recognition
Revenue is recognized in the period they are earned.
When the merchandise has arrived to the buyer or when
services are rendered even cash receivable
Criteria: -
there is a change of ownership/title.
buyers are willing to pay.
the stability of the currency.
Buyers are able to pay.
Example:
Azmal is an entrepreneur pottery. He has received 100
reservations porcelain vase on January 1, 2013 and has
received a payment of RM1,000. The booking was sent on
January 15, 2013. When the sales above should be
recognized? Give your opinion.
Solution:
En. Azmal need to recognize sales revenue of RM1,000 on
15 January 2013 because of a change of ownership at that
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