Question
Analyze the revenue recognition for Company G using the following table, adhering to the principles of Realization Concept and Matching Concept: Item Quantity Sold Price
Analyze the revenue recognition for Company G using the following table, adhering to the principles of Realization Concept and Matching Concept:
Item | Quantity Sold | Price per Unit ($) | Total Revenue ($) |
Product A | 100 | $50 | $5,000 |
Service B | N/A | $1,000 | $10,000 |
Total | N/A | N/A | $15,000 |
Revenue from the sale of Product A should be recognized at the point of sale, following the Realization Concept. Therefore, $5,000 should be recognized in the period when the products are sold, regardless of when the cash is received. Similarly, revenue from Service B should be recognized when the service is provided, adhering to the Matching Concept, ensuring that revenue is matched with the expenses incurred to generate that revenue.
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