Answer
For sales revenue to be recognized at P & G, it must meet two requirements. First, it must be completely earned. Second, it must be undoubtedly realized/ realizable. The sale of inventory is what brings revenue at P & G. Therefore, the revenue is equal to the net of cumulative sales and taxes that the company gathers. Other costs included in the revenue include shipping and handling the inventory. Revenue recognition takes place once a product has been shipped or after it gets into a customer's hands. At the moment of recognizing revenue, the customer owns the title and accepts all the risks linked with the product.
P & G offers a myriad of trade promotions to its clients. The trade promotions include attractive coupons, appealing price-related allowances and merchandising of funds. Amounts spent on trade promotions are deducted from P &G's sales. In most cases, the trade promotions run for roughly a year. Consequently, accrued amounts associated with the trade promotions that should be paid are categorized in the category of Accrued & other liabilities.
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