Reply With QuoteIf we just give you the answers to your homework you won't learn. Go look it up in your books. Then next time you'll remember.
Hey guys i was wondering if you could help me out. I'm correcting my accounting quiz and know the right answer, but have to explain it. What does this phrase mean? "The buyer aquiring the product for resale has economic substance apart from that provided by the seller." It's about improperly recognizing revenue when a wholesale division sells a product to it's website division. Does it mean the sale can't be transacted because it is essentially the same company selling its own product to itself? Thanks guys.
David
If we just give you the answers to your homework you won't learn. Go look it up in your books. Then next time you'll remember.
NO. It means the buyer can resale the item on EBAY and make a profit because the company's prices are below market value. next time pay attention in class. :hammerhea
During the summer they're boaters, during the winter they're a jury.
I have the book infront of me. It states the concept and not the definition of economic substance. Like i said i know the answer. I want to understand it more. Regarding the ebay why would they make a profit, when they sold it to themselves, already recognized the revenue. Its not about the website division even selling it yet. Any CPAs?
Hey guys i was wondering if you could help me out. I'm correcting my accounting quiz and know the right answer, but have to explain it. What does this phrase mean? "The buyer aquiring the product for resale has economic substance apart from that provided by the seller." It's about improperly recognizing revenue when a wholesale division sells a product to it's website division. Does it mean the sale can't be transacted because it is essentially the same company selling its own product to itself? Thanks guys.
David
I think it means the "buyer" now has the right to use a set or said margin to turn the product for profit.
I think it means I don't want to be a CPA.I hated accounting in college. I like to deal with two number 1 and 0.
I think it means I don't want to be a CPA.
Haha that was another way to go. The actual accounting is easy. Its the concepts that are hard.
I believe that it means that he has money or credit available to him, other than credit provided by the seller.
Or not
Is that a fancy way of saying the compoany will incur two different classes of revenue/tax; one for the intercompany sale, the other for the resale, and they would not be taxed the same?
The intercompany sale is not the same as the anticipated resale, which falls under true economic substance (as opposed to the tax avoidance of wholesale to web division sale)?
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