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SEC Accounting and Auditing Enforcement Release (AAER) No. 108 specifies certain conditions or criteria that a bill and hold transaction of a public company should meet in order to qualify for revenue recognition. The AAER also specifies certain factors that should be considered in evaluating whether a bill and hold transaction meets the requirements for revenue recognition. AAER No. 108 state that a "bill and hold" transaction should meet the following conditions:•The risks of ownership must have passed to the buyer.•The customer must have made a fixed commitment to purchase the goods, preferably reflected in written documentation.•The buyer, not the seller, must request that the transaction be on a bill and hold basis, The buyer must have a substantial business purpose for ordering the goods on a bill and hold basis.•There must be a fixed schedule for delivery of the goods. The date for delivery must be reasonable and must be consistent with the buyer's business purpose (e.g., storage periods are customary in the industry).•The seller must not have retained any specific performance obligations such that the earning process is not complete.•The ordered goods must have been segregated from the seller's inventory and not be subject to being used to fill other orders.•The equipment must be complete and ready for shipment.Required:1.Discuss why a buyer may want to order on a bill and hold basis. Why might a seller want to classify an order as bill and hold if it does not meet the above criteria?2.Identify and discuss the reliability of the types of evidence an auditor would need to determine whether each condition cited above was met for a bill and hold transaction.
Summarize your ideas about internal controls. An introduction to internal controls, explaining in your own words the two primary goals of internal control. A description of how the Sarbanes-Oxley Act of 2002 has affected internal controls
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There're 3 major requirements of Code Section 351: (1) the transfer must consist of property, (2) the transfer must be solely in exchange for stock and (3) the transferors must be in control immediately after the exchange.
Explain in detail a post-closing trial balance, how it relates to the practice of accounting and its uses in business?
Search the Internet for at least four (4) stories about major charitable contributions by individuals, including Bill Gates, Warren Buffett, Steve Jobs, and at least one (1) other individual.
Tarrah Company's variable expenses are 72% of sales. The company's break-even point in sales is $2,450,000. If sales are $60,000 below the break-even point, the company would report a:
Mary has a three-stock portfolio and is interested in estimating its overall return next year. She has $25,000 invested in Orange Corp-Calculate the portfolio beta and then apply the SML.
LaGrange Corp. has forecasted that over the next four years the average annual after-tax income will be $45,731. The average book value of the manufacturing equipment that is used is $167,095. What is the accounting rate of return?
Journal entries for equity securities for Capriati Corp in 2012, their first year of business, including unrealized gains or losses in 2012:
List and describe four potential problems with a "traditional" overhead allocation system. List and describe four "red flags" that may indicate you should consider revising your overhead allocation system.
Lisa's School Supplies suffered a fire loss. The company needs to estimate the cost of the goods destroyed. Beginning inventory was $500,000, purchases totaled $700,000, and sales came equaled $1,000,000.
Selected balances from a company's financial statements are shown below. Calculate the following (a) accounts receivable turnover (b) inventory turnover (c) days' sales uncollected
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