After studying this chapter, you should be able to:
LO1 Discuss the general objective of the timing of revenue recognition, list the two general criteria that must be satisfied before revenue can be recognized, and explain why these criteria usually are satisfied at a specific point in time.
LO2 Describe the installment sales and cost recovery methods of recognizing revenue for some types of installment sales and explain the unusual conditions under which these methods might be used.
LO3 Discuss the implications for revenue recognition of allowing customers the right of return.
LO4 Identify situations that call for the recognition of revenue over time and distinguish between the percentage-of-completion and completed contract methods of recognizing revenue for long-term contracts.
LO5 Discuss the revenue recognition issues involving multiple-deliverable contracts, software, and franchise sales.
LO6 Identify and calculate the common ratios used to assess profitability.
