5-1 Companies that engage in long-term salescontracts such as construction projects oftenuse the cost-to-cost method to recognizerevenue. This means that revenue isrecognized in proportion to the project'scompletion. Answer: True / FalseTopic: Sales on Consignment 5-2 A seller,acting as an agent for another company byselling the company's goods on consignment,recognizes the gross amount of the sale asrevenue. Answer: True / FalseTopic: Revenue Recognition 5-3 Bed Bath andBeyond has a return policy which states thatthe customer "may return a purchase for arefund, merchandise credit, or exchange toany of our stores nationwide or to our returnsprocessing center". The company can reportrevenue on the full amount as soon as themerchandise is sold.Answer: True / False

The construction companies use the cost to cost method where the cost would be paid on the…

5-1 Companies that engage in long-term sales contracts such as construction projects often use the cost-to-cost method to recognize revenue. This means that revenue is recognized in proportion to the project's completion Answer: True / False

5-1 Companies that engage in long-term sales contracts such as construction projects often use the cost-to-cost method to recognize revenue. This means that revenue is recognized in proportion to the project's completion Answer: True / False

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter8: Revenue Recognition, Receivables, And Advances From Customers

Section: Chapter Questions

Problem 19E

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Statement 1: Depreciation on equipment a company uses in its selling and administrative activities would be classified as a product cost. Statement 2: A publisher that sells its books trough agents who are paid a constant percentage commission on each book sold would classify the commissions as variable cost. Statement 3: The cost of goods manufacture is calculated by adding the amount of work-in-process at the end of the year to the cost of raw materials used, direct labor worked, and manufacturing overhead incurred for the year and then subtracting work-in-process at the beginning of the year. Statement 4: Variable cost per unit is unaffected by changes in activity. Statement 5: A cost is either direct or indirect. Direct is considered as a prime cost while indirect is considered a conversion cost. a. All statements are true d. Statements 1, 4 and 5 are true b. Statements 1, 3 and 5 are true e.Statements 2, 4 and 5 are true c.Statements 1, 2 and 4 are true f. Statements 2, 3 and 4…
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JOINT AND BY-PRODUCT PROBLEM 1 Maroon Ltd is a company that produces chemicals for the cleaning industry. One of its processes manufactures join products Y and Z, and by-product X. The company uses the net realizable value of its joint products to allocate joint production costs. The by-product is valued for inventory purposes at its market value less its disposal cost, and this value is used to reduce the joint production cost of P2,015,000. Information regarding the company’s August 2020 operations are presented below: In liters Y Z X Finished Goods inventory, August 1 30,000 100,000 40,000 August Sales 1,340,000 760,000 240,000 August Production 1,600,000 800,000 200,000 In Peso Further Processing cost 1,400,000 1,520,000 Final Sales value per Liter 10 14 Sales value per liter at split off 2.40 Disposal Cost per liter 0.40 Required: Calculate the allocation of joint cost…
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