Revenues result from the sale of goods and services to customers and increase cash and/or accounts receivable.

(a). Revenues should be recognized when all of the following events have occurred:

(1) The seller has completed most activities necessary to produce and sell its products.

(2) The seller has incurred the costs necessary to produce and sell its products or can reasonably estimate those costs.

(3) The seller can measure objectively the amount of revenue it has earned.

(4) The seller is reasonably sure of collecting cash from the buyer.

(b). Revenues from long-term contracts are recognized each fiscal period in proportion to the passage of time or the amount of work covered by the contract that has been completed.

(c). Sales discounts and returns are deducted from gross revenues in computing the amount of net revenue reported on the income statement.

(d). Uncollectible accounts expense is estimated each fiscal year to match the cost of expected doubtful accounts of customers with the revenues that resulted in the doubtful accounts.

(e). Warranty expenses are estimated each fiscal year to match these costs with revenues that resulted in the costs.

Competency Building Activity 6: Jobs By now, you have a good sense of the way your hypothetical program will work. As you completed the previous chapter, you designed an organizational charge to fit your program’s mission. Now it is time to consider the kinds of jobs that will fit your organization. Identify several of the key jobs that will make your program work. Choose one of these jobs and address the following questions. 1. Briefly describe the job that you have selected. 2. What will be the most important activities that the person holding this job will carry out? 3. If you were planning to hire a person for this job, how would you answer the following questions? . . What would be the primary qualifications the person should have? How would you assess whether the job candidates possess these qualifications? What would be the key questions you would ask in an interview situation? What answers would you be seeking? .