Open AccessThe Rule Of 78s: Practical Applications And Theoretical Limitations
Author(s) -
George R. McGrail
Publication year - 2011
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.149
H-Index - 22
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v2i4.6554
Subject(s) - explication , revenue , computer science , actuarial science , accounting , economics , epistemology , philosophy
The purpose of this article is to provide an in-depth explication of basic concepts and operational precepts of the rule of seventy-eights sol that the accountant may better understand and, therefore, better advise his client in regard to interest income recognition. This income recognition technique does have wide application and as will be shown, is a theoretically valid approach to recording interest revenue so long as certain constraints are not violated.