Category Archives: Accrual Accounting

The Percentage of Completion Method

There are several different acceptable methods for recognizing revenue for long-term contract sales: percentage of completion, installment sales, cost recovery method, and completed contract method. The most preferred method is percentage of completion, if the information is readily available. Before ...
Read More »

Installment Sales: Why Do We Use Them?

Why do we use installment sales? Installment sales are only used for financial reporting when there is no reasonable basis for estimating the degree of collection ability. Revenue recognition occurs when cash is actually collected, rather than at the point ...
Read More »

Financial Statement Cycles

The audit process consists of five financial statement cycles to ensure that all of the financial statement components are reviewed and tested. By keeping closely related account transactions together, and separating those closely related accounts into cycles, auditors will be ...
Read More »