1. Should the two contracts be combined for purposes of applying the five-step revenue recognition model? 2. What amount of revenue should Panarin associate with each of the contracts? 3. When should revenue be recognized on each of the contracts?

1. Should the two contracts be combined for purposes of applying the five-step revenue recognition model? 2. What amount of revenue should Panarin associate with each of the contracts? 3. When should revenue be recognized on each of the contracts?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 2MC: Which of the following best represents the matching principle criteria? A. Expenses are reported in...

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1. Should the two contracts be combined for purposes of applying the five-step revenue recognition model?
2. What amount of revenue should Panarin associate with each of the contracts?
3. When should revenue be recognized on each of the contracts?

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The first step in the revenue recognition process is determining if a contract is in place between the seller and the customer. A contract is an agreement between two or more parties that creates enforceable rights and obligations. The standard states that a contract may be written, oral, or implied by customary business practices. To be a contract, the accounting standard states that it must meet five criteria. Required: Discuss the criteria necessary for a contract to be considered under the revenue recognition process. How would a company account for a contract that does not meet the criteria?
The third step in the process for revenue recognition is to (Enter 1, 2, 3, or 4 that represents the correct answer): determine the separate performance obligations in the contract. allocate transaction price to the separate performance obligations. determine the transaction price. determine the amount of revenue when each performance obligation is satisfied.
The FASB has established a Five-Step process to recognize revenue. Which of the following is not one of those steps? A. Ability to identify the contract with the customer. B. Determination thatcollection of the entitled contractual consideration from the customer is probable. C. Properly identify all of the performance obligations within the contract. D. Ability to determine the transaction price. E. Properly identify all of the deliverables and allocate the transaction price to each.
Under PFRS 15, what is the measurement basis of revenue from contracts with customers? Select the correct letter: A. Revocable amount of the consideration received or receivable B. Book value of the consideration received or receivable C. Fair value of the consideration received or receivable D. Historical cost of the consideration received or receivable
Explain how to Determining Whether a Contract Exists for Revenue Recognition Purposes.
How can a single revenue recognition standard address all the complexities and unique clauses regarding revenue issues incorporated into contracts such as the oil and gas industry and defense contracting? Please provide references if any.
Under PFRS 15, when shall a consignor recognize revenue from its consignment sales? When it is probable that future economic benefits will flow to the consignor and the fair value of the revenue can be measured reliably. When the consignor receives cash remittance from the consignee. When the consignor satisfies its performance obligation under consignment contract. When the consignor enters into a consignment contract with a consignee.
describe general principles of revenue recognition and accrual accounting, specifi c revenue recognition applications (including accounting for long-term contracts, installment sales, barter transactions, gross and net reporting of revenue), and implications of revenue recognition principles for fi nancial analysis
Topic: REVENUE FROM CONTRACTS WITH CUSTOMERS Requirements: a. Identify the performance obligations in the contracts. b. How should the entity recognize revenue from the contract? (State also the timing of revenue recognition for each identified performance obligation.)
Questions: 1. How much revenue is recognized in the contract in 20x3? 2. How much profit is recognized in the contract in 20x3?
Which of the following statements regarding contracts is incorrect?a. Identifying the contract with the customer is the first step of the revenue recognition model.b. A contract must be written to be valid.c. For a business that provides services, the performance obligation is generally satisfiedwhen the service provider has substantially completed the service for the customer.d. A contract is an agreement between two parties that creates enforceable rights orperformance obligations.
Companies recognize revenue when goods or services are transferred to customers for the amount the company expects to be entitled to receive in exchange for those goods or services. That core principle is implemented by (1) identifying a contract with a customer, (2) identifying the performance obligations in thecontract, (3) determining the transaction price of the contract, (4) allocating that price to the performanceobligations, and (5) recognizing revenue when (or as) each performance obligation is satisfied