The Debit Side of an Account

question 168

Multiple Choice

The debit side of an account

• A) depends on whether the account is an asset, liability or stockholders' equity item
• B) can be either side of the account depending on how the accountant set up the system
• C) is the right side of the account
• D) is the left side of the account

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Definitions:

Revenue Recognition

This is an accounting principle that outlines the specific conditions under which revenue is recognized and can be reported in financial statements.

Percentage-Of-Completion Method

The percentage-of-completion method is an accounting approach used for recognizing the revenue and expenses of long-term contracts based on the progress of the work performed.

Revenue Recognition

The process of recording income when it is earned and realizable, according to specific criteria, regardless of when the cash is received.

Completed-Contract Method

An accounting method where revenue and profit are recognized only when a contract is completed, commonly used in long-term project contracts.