Wavefront Technology Solutions Inc V.WEE.H

Accounting

[mikhal]

Hi Folks; Excuse the teaching part.
 Accounting is a double entry system so the books balance.
The sale is made and the entry is Credit Sales ( income or revenue same meaning) Debit Cash ( if paid in cash at time of sale) or as the more commercial sales norm is Debit Accounts Receivable.
The revenue is recognized at time of sale not at time of collection of accounts receivable.
Thus collection of accounts is not revenue but Debit Bank and Credit Accounts receivable.
The balance sheet accounts are affected but no Income statement account or ( profit and loss accounts are affected at this time.
WEE has some accounting for long term contracts that requires revenue to be recognized evenly throught the term of the contract. One year contracts recognized equally even though the tools may be sold in one month ( neptune tools sales handled in this manner). The contracts may provide maintenance or support for a year so the company has an obligation to deliver some services after the delivery of the tools. This results in some defferal of revenue as required by Accounting Regulations ( rules guidlines).
Hopefully cleared for those wanting to know more about "liars can figure and figures can lie"

Peace Mike