On first reading the material, Norman thought it was going to be easy to prepare an income statement. He remembered learning that for most businesses' revenue was earned when good were sold (that is, when title passed from the seller to the buyer). However, as he read the statements of the FASB, he realized that revenues could be recognized when production was complete or when cash was collected. According to the FASB standard, "revenues are considered to have been earned when the entity has substantially accomplished what it must do to be entitled to the benets represented by the revenues."2 Norman realized that in order to determine the revenues for 2008, he must first determine when the earning process is complete. This, however, was not a usual business. Therefore, Norman was not sure when Reptile Factory Enterprise was "entitled to the benefits represented by the revenues". In order to determine the critical point in the operations cycle when the business could do this, he decided to talk to the three top executives