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Revenue Recognition

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Revenue Recognition

  • This topic has 3 replies, 2 voices, and was last updated 9 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • August 19, 2015 at 2:16 pm #267772
    Muslim Farooque
    Member
    • Topics: 190
    • Replies: 134
    • ☆☆☆

    I had a question regarding credit sales, my tutor gave me an example that a Mr.c made a transaction of £50,000 with Mr.A which Mr.A will pay back after 2 years,
    The goods are delivered and dispatched , the tutor said in the current year he will record £40,000(net present value cost of capital 10%) and record remaining amount £10,000 as £5000 for next two year as interest income, now my question is that is this correct? And if it is correct then is that £5000 like a deferred income?

    Regards

    August 19, 2015 at 7:10 pm #267800
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23321
    • ☆☆☆☆☆

    41,322 recognise as revenue at date of sale

    Next year, recognise 4,132 finance income (Dr Receivable, Cr Finance Income). Receivable now stands at 45,454

    Year 2, recognise a further 4,545 (Dr Receivable, Cr Finance Income) Receivable now stands at 50,000 and will (hopefully) be received in cash

    Ok?

    August 19, 2015 at 8:37 pm #267806
    Muslim Farooque
    Member
    • Topics: 190
    • Replies: 134
    • ☆☆☆

    Thanks Sir Mike!

    August 19, 2015 at 11:00 pm #267812
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23321
    • ☆☆☆☆☆

    You’re welcome

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