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Revenue Is Measured in Terms of the Value of the Products

question 44

Essay

Revenue is measured in terms of the value of the products or services exchanged in an "arms-length" transaction.This value represents either the net cash equivalent or the present discounted value of the money received or to be received in exchange for the products or services that an enterprise transfers to its customer.
Required:
Explain how this concept of the measurement of revenue might be used to determine the proper treatment of sales discounts and bad debt losses.


Definitions:

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