Indicate whether each of the following statements is true or false. Delayed recognition of revenue is appropriate if the sale does not represent substantial completion of the earnings process. If the goods (services) that are exchanged in barter transactions are dissimilar in nature, the exchange is recorded as revenue. When services are delivered by performing more than one act, revenue should be recognized as the various acts that make up the entire transaction occur.

Indicate whether each of the following statements is true or false. Delayed recognition of revenue is appropriate if the sale does not represent substantial completion of the earnings process. If the goods (services) that are exchanged in barter transactions are dissimilar in nature, the exchange is recorded as revenue. When services are delivered by performing more than one act, revenue should be recognized as the various acts that make up the entire transaction occur.

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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Which of the following conditions would violate the revenue recognition principle? Revenue is recognized when related costs can reliably be measured. Revenue is recognized when delivery has occurred or services have been provided. Revenue is recognized when collection is possible. Revenue is recognized when the seller’s price to the buyer is fixed and determinable.
In accounting for revenue recognition under ASC Topic 606, revenue can be recognized before a contract exists when cash has been received and: Goods have already been delivered to a customer, and there is no further obligation for the seller to deliver goods or services. The cash has been received for goods identified to be delivered and the cash is refundable. The cash has been received for goods or services to be delivered and the cash is nonrefundable. Revenue should never be recognized before a contract exists.
Which of the following is not a criterion to recognize revenue under GAAP? A. The earnings process must be completed. B. A product or service must be provided. C. Cash must be collected. D. GAAP requires that the accrual basis accounting principle be used in the revenue recognition process.
Which of the following is the principle that a company must recognize revenue in the period in which it is earned; it is not considered earned until a product or service has been provided? A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principle
When goods are sold on a bill-and-hold basis, what conditions must be met to recognize revenue upon receipt of the order?
Which of the following conditions would support recognition of revenue? The seller’s price to the buyer is being negotiated. Delivery has occurred or services have been provided. Collection is possible. Significant risks and rewards of ownership of the goods will soon be transferred to the purchaser by the seller.
Why are contra-revenue accounts used rather than directlydeducting from the Sales Revenue account?
Which of the following accounts is an example of a contra-asset?A) Cost of Goods Sold B)Sales Discounts C) Purchases D) Deferred Revenue E) LIFO Reserve
Bias in revenue recognition would least likely be suspected if:A . the fi rm engages in barter transactions.B . reported revenue is higher than the previous quarter.C . revenue is recognized before goods are shipped to customers.
In applying the revenue recognition principle, which of the following statements regarding multiple performance obligations is incorrect? A. If the transaction has multiple performance obligations, the transaction price is allocated among the different performance obligations. B. Revenue is recognized after all performance obligations are satisfied. C. A contract might have multiple performance obligations. D. The business can recognize revenue when (or as) it satisfies each performance obligation by transferring a good or service to a customer.
According to PAS 18 Revenue, which of the following is not a criterionto be satisfied before revenue from the sale of goods should be recognized inprofit or loss?a. Revenue can be reliably measuredb.Control over the goods sold has been relinquished but managementmaintainscontinuing involvement over the goods soldc. C The risks and rewards of ownership has been transferred to the buyerd. D The outcome of the transaction is probable
When does sales revenue is recognized? When does sales revenue is recorded? Does recognize and record have differences?