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Technology Stocks : America On-Line: will it survive ...?
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To: Gaffa who wrote (3005)5/5/1997 11:55:00 PM
From: Curiosity   of 13594
 
Gaffa, you need a lesson, maybe two, in accounting. Recognition and
realization have to do with INCOME & REVENUE not CASH on the balance
sheet or the cash flow statement. Yes, their cash would go up, i.e.
debit cash, and credit unearned revenue. With the unearned revenue
portion not showing up on the income statement but on the balance
sheet, a liability of AOL in its purest sense. Now, as they REALIZE
or become entitled to RECOGNIZE this UNEARNED REVENUE as EARNED REVENUE because they EARNED it; then presumably they would debit
unearned revenue and credit REVENUE.

This is pretty basic stuff. Good luck in your future financial
analysis of investment opportunities like AOL.

Curiosity+
@ The Ohio State University
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