Share
Explore BrainMass

Revenue

Portion 1:

Please post your feedback to each these questions.

1. When do accountants recognize revenue? Why is this so important in an accrual accounting system?
2. Depreciation is cost allocation not valuation and accumulated depreciation is a sum of cash being accumulated for the replacement of fixed assets. Do you agree? Explain your answer?

Portion 2:

Please post your feedback to these questions below.

In what ways do the elements of the four financial statements interact with one another?
How might changing one of the financial statements affect the other financial statements?
Why is it essential to understand the relationship between the financial statements?

Solution Preview

Portion 1:

Please post your feedback within 300 words to each of these questions.

1. When do accountants recognize revenue? Why is this so important in an accrual accounting system?

Accountants recognize revenue as it comes in to the firm. For example, a consumer buys a lawn mower to cut the grass at his or her own house. This is money that the organization needed to survive in order to pay for workers, facility costs and for any additional expenses. This is what keeps a person motivated as an accountant knowing that much business is taking place. He or she will have to do everything possible to keep the information accurate. This is why it is so important for an accountant to make sure that the revenue is recognized because it is a part of the accounting system set forth by the company itself. Without keeping track of revenue, the firm would no longer exist. This is why it is crucial for the organization to keep track of all the assets that come in on a regular basis. He or she is able to stay current with all the revenue because of managers counting it up, and then the accountant verifying or modifying the numbers as needed. In essence, a person has to do everything possible to keep everything as accurate as possible. Because of their hard work, one is able to make sure that all the hard work that is set forth on a regular basis to have all their hard work as accurate as possible. If one fails to do this, then he or she faces the possibility of getting terminated and the company facing fines that were not needed. This is mandatory for that individual because when anything is inaccurate, then people do not get paid properly, and eventually bankruptcy could occur. Regardless, any individual who is an accountant has to make sure that everything is accurate, so that people will do everything needed to meet the needs of others in their community. The accountants role is vital to the life of the organization, otherwise major problems could arise that would hurt everyone through the entire process.

2. Depreciation is cost allocation not valuation and ...

Solution Summary

This solution discussed revenue and the role of the accountant, especially in regards to the four financial statements.

$2.19