Evaluation of Current Accounting Policy of Phone Services Essay

Evaluation of Current Accounting Policy of Phone Services - Essay Example There are generally two key factors for revenue recognition: Completion of earning process, Assurance of payment. The policy which helps inter-department on recognition of revenue is the renewal of portable internet services for customers who already have phone-e-devices at a price of $240 (Kennon, 2010). The accounting policies which they are adopting can increase their market share and sales as they are offering a low price to their customers. This is also helping them in penetration of market for their new products. The new policies which the firm can adopt are cost policy and revenue recognition policy. They are offering the low price to its customers as compared to their competitors due to the low signal and service quality than their competitors. They cannot increase the price or service charge of Prepaid Portable Internet Connection, as doing so can result in shifting of its customers towards other brands. Another risk which firm faces are that if in near future their competit ors decrease the price of their products, the company may suffer losses. To avoid this company can practice cost-cutting techniques in the manufacturing of their products. If they do not manufacture their parts or components and buy it from suppliers, they should try to focus on cheap and best quality suppliers. The activities of any company which decides revenue recognition are: Sale of goods, Rendering of services and Construction contracts. Therefore these activities have to be properly managed.