Understanding Accounting
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Course reading · Unit 2

Unit 2. Reporting performance, disposals, and revenue

Follow Sable Ridge Instruments, a corporation that sells laboratory analyzers and supplies and provides installation.

Chapters

Read Chapters 6 through 8 in order. Each chapter uses concepts and financial statements introduced in the chapter before it.

  1. Chapter 6 · course objectives 2.1a, 2.1b Preparing and interpreting the income statement
    • Prepare a multiple-step income statement.
    • Analyze operating performance using income-statement subtotals.
  2. Chapter 7 · course objectives 2.2a, 2.2b Discontinued operations
    • Classify disposals and unusual items within the income statement.
    • Present the financial-statement effects of discontinued operations.
  3. Chapter 8 · course objectives 2.3a, 2.3b, 2.3c, 2.3d, 2.3e, 2.3f Apply the revenue model
    • Determine whether an arrangement should be accounted for as a contract with a customer under ASC 606.
    • Determine the performance obligations in a customer contract.
    • Determine the transaction price for a customer contract.
    • Allocate the transaction price to performance obligations.
    • Determine when and how much revenue to recognize for each performance obligation.
    • Classify and account for the balances arising from a customer contract.