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1. Revenue is usually recognized for accounting purposes when a performance obligation is satisfied. In...

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Accounting

1. Revenue is usually recognized for accounting purposes when a performance obligation is satisfied. In some situation, revenue is recognized over time as the fair value of assets and liabilities. In other situation, however, accountants have developed guidelines for recognizing revenue at the point of sale.

a. Explain and justify, why revenue is often recognized at time of sale.

b. Explain in what situations it would be appropiate to recognize revenue over time.

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