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a) -Revenues are inflows of assets or settlements of liabilities or both. Revenues come from activities of the entity’s central operations.
-Gains are increases in net assets and from peripheral or incidental transactions of an entity.
-The difference between gains and revenues depend to a great extent on the typical activities of a company. For example, when McDonald’s sells a hamburger, it records the selling price as revenue. However, when Mc Donald’s sells land, it records any excess of the selling price over book value as a gain.
b) -In cash basis accounting, revenues are simply recognized when cashed is received no matter when and how the services were performed or goods delivered.
-In accrual basis accounting, revenues are recognized when they are realized/ realizable or earned in cases of:
+Persuasive evidence of an arrangement exists
+Delivery has occurred or services have been rendered
+The seller's price to the buyer is fixed or determinable......

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Approximate Word Count: 811
Approximate Pages: 4 (250 words per double-spaced page)

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