To help you become familiar with the accounting standards, this case is designed to take you to the FASB’s Web site and have you access various publications. Access the FASB’s Web site at http://www.fasb.org. Click on “Pronouncements & EITF Abstracts.”

In this chapter, we discussed the principle of revenue recognition. For this case, we will use Statement of Financial Accounting Concept No. 5, “Recognition and Measurement in Financial Statements of Business Enterprises.” Open Concept Statement No. 5.

1. Read paragraph 83a. When are revenues realized? That is, what event or events have to take place?
2. Read paragraph 83b. When it comes to the earnings process, what is the difference between revenues and gains?