Please write a minimum of 150 words each 6. When is revenue earned and therefore should...

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Accounting

Please write a minimum of 150 words each
6. When is revenue earned and therefore should berecognized?
7. When a company pays $10,000 for insurance that will cover itfor two years, the transaction is not immediately recognized as anexpense. Explain why.
8. Distinguish between cash flows resulting from operatingactivities, financing activities, and investing activities.

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Answer 6 Meaning of Revenue Revenue means gross inflow of cash receivables and other consideration arising during the course of ordinary activities of the organization It arises because of the operating activities undertaken by the organization Operating activities such as sale of goods rendering of service use of enterprise resources by others yielding interest royalty or dividend etc generate revenue for the enterpriseorganization It is charges made to the customers or clients In case of an agency revenue is the amount of commission andnot gross inflow of cash receivables or other consideration Recognition of Revenue 1 Sale of Goods Revenue shall be recognized when risk and rewards incidental to ownership are transferred to the other partyIt See Answer

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