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Accounting allures occur when reported results are not presented in accordance with generally accepted accounting principles. These tailures can produce significant financial loses to investors

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Accounting allures occur when reported results are not presented in accordance with generally accepted accounting principles. These tailures can produce significant financial loses to investors and creditors. Oftentimes in accounting failure results from an incorrect application of revenue recognition concepts. Repression Corporation included each of the following described transactions in revenue during 2015. Three of these transactions were aporopriate, and three were not Determine which are "OK" and which are not OK ) Goods were sold and shipped in late 2015, but the product still requires substantial installation and setup services. The price and terms of sale stipulate that seller must satisfactorily comolete all installation and setup at the buyer's location CZ Goods were produced according to a customer purchase order, but had not yet been shipped by the end of 2015 Goods were delivered to customers during early 2015, but the customers had ordered and paid for the goods during 2014 14 Customers purchased goods and services during late 2015, but credit torms permitted them to delay payment until early 2016 Full payment is expected eventually Advance uyment from a customer in a foreign country was received in 2015, for services to be provided in 2016 16 Goods were purchased and paid for by customers during 2015, but customers may return delective goods for warranty work or a refund. The expected warranty/refund dams are subject to reasonable estimation and not anticipated to be significant Accounting "failures" occur when reported results are not presented in accordance with generally accepted accounting principles. These failures can produce significant financial losses to investors and creditors. Oftentimes, an accounting failure results from an incorrect application of revenue recognition concepts. Revgression Corporation included each of the following described transactions in revenue during 2015. Three of these transactions were appropriate, and three were not. Determine which are "OK" and which are "not OK." Goods were sold and shipped in late 2015, but the product still requires substantial installation and setup services. (1) The price and terms of sale stipulate that seller must satisfactorily complete all installation and setup at the buyer's location. (2) Goods were produced according to a customer purchase order, but had not yet been shipped by the end of 2015. 3) Goods were delivered to customers during early 2015, but the customers had ordered and paid for the goods during 2014. 4) Customers purchased goods and services during late 2015, but credit terms permitted them to delay payment until early 2016. Full payment is expected eventually. Advance payment from a customer in a foreign country was received in 2015, for services to be provided in 2016. | Goods were purchased and paid for by customers during 2015, but customers may return defective goods for warranty work or a refund. The expected warranty/refund claims are subject to reasonable estimation and not anticipated to be significant

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