Accounting Policies and Revenue Recognition Essay Sample

Accounting Policies are the specific policies and processs used by a company to fix its fiscal statements. These include any methods. measurement systems and processs for showing revelations. Accounting policies differ from accounting rules in that the rules are the regulations and the policies are a company’s manner of adhering to the regulations. Gross Recognition:

Gross acknowledgment determines the accounting period. in which grosss and disbursals are recognized. General Mills recognize gross revenues gross when the cargo is accepted by their client. Gross saless include transporting and managing charges billed to the client. We by and large do non let a right of return. However. on a limited case-by instance footing with anterior blessing. General Mills may let clients to return merchandise. Receivables from clients by and large do non bear involvement. Footings and aggregation forms vary around the universe and by channel. Cash and Cash Equivalents:

Cash and equivalents are hard currency or hard currency equivalents that a company possesses at any given clip. Examples of hard currency equivalents are: money market histories. exchequer measures. and short term authorities bonds. Cash and hard currency equivalents are a business’ most liquid assets. Cash on manus consequences from a positive hard currency flow statement. General Mills consider all investings purchased with an original adulthood of three months or less to be hard currency equivalents. Merchandise Inventories

Merchandise stock list is the value of the merchandises that a retailing or wholesaling company intends to resell for a net income. All stock lists in the United States other than grain are valued at the lower of cost. utilizing the last-in. ?rst-out ( LIFO ) method. or market. Grain stock lists and all related hard currency contracts and derived functions are valued at market with all net alterations in value recorded in net incomes presently. Inventories outside of the United States are valued at the lower of cost. utilizing the ?rst-in. ?rst-out ( FIFO ) method. or market. Transporting costs associated with the distribution of ?nished merchandise to our clients are recorded as cost of gross revenues. and are recognized when the related ?nished merchandise is shipped to and accepted by the client. Property and Equity

Property and equity is a company plus that is critical to concern operations but can non be easy liquidated. Land is recorded at historical cost. Buildings and equipment. including capitalized involvement and internal technology costs. are recorded at cost and depreciated over estimated utile lives. chiefly utilizing the straight-line method. Durable assets are reviewed for damage whenever events or alterations in fortunes indicate that the transporting sum of an plus ( or plus group ) may non be recoverable. An impairment loss would be recognized when estimated undiscounted hereafter hard currency ?ows from the operation and temperament of the plus group are less than the transporting sum of the plus group.