Professor Elam

Tuesday March 2 2010

the process of accounting, one incurs a liability in exchange for a service or product, that liability is worked off short or long term and accounting allocates it by period, simple really but

conversely, one moves product from inventory or provides the service, and so  one records a revenue item that is reflected in receivables and then finally into cash. in the case of a long term receivable like a lease or construction in progress, revenue is allocated or recognized by period, simple really but