t14 Statement 1: The allocation of the transaction price is based on the stand-alone selling prices ofthe products sold and premiums.Statement 2: In the case of premiums as a component of the transaction price, cash receivedfrom the customer during the redemption of premiums shall be a deduction from the cost ofpremiums.Statement 3: If the loyalty award/point is supplied by a third party, the amount received asconsideration for the goods or services sold is recognized in full as unearned revenue andrecognized as revenue upon the redemption of customers.O All of the statements are incorrect.O Only two statements are correct.O Only one statement is correct.O All of the statements are correct.

Transaction price refers to the sum amount of money a company receives or expects while transferring…

Answered: Statement 2: In the case of premiums as…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter12: Financial Statements, Closing Entries, And Reversing Entries

Section: Chapter Questions

Problem 3E: Identify each of the following items relating to sections of an income statement as Revenue from...

See similar textbooks

Similar questions

Identify whether each of the following transactions, which are related to revenue recognition, are accrual, deferral, or neither. A. sold goods to customers on credit B. collected cash from customer accounts C. sold goods to customers for cash D. collected cash in advance for goods to be delivered later
Name two situations where cash would be remitted to a retailer from a manufacturer after purchase.
A contract between one or more parties creates: a. the date that cash is paid by the customer b. enforceable rights and obligations for the parties c. revenue for recognition d. the fixed amount of payments for the good or service
Identify each of the following items relating to sections of an income statement as Revenue from Sales (S), Cost of Goods Sold (CGS), Selling Expenses (SE), General Expenses (GE), Other Income (OI), or Other Expenses (OE). a. Utilities Expense b. Advertising Expense c. Purchases Discounts d. Sales Returns and Allowances e. Interest Income f. Freight In g. Depreciation Expense, Equipment h. Interest Expense i. Rent Expense j. Sales
Is it true that, when one firm sells to another on credit, the seller records the transaction as an account receivable while the buyer records it as an account payable and that, disregarding discounts, the receivable typically exceeds the payable by the amount of profit on the sale?
At what point does revenue recognition occur? A. When the purchase order is received B. When the seller receives the money for the job C. When the seller has met performance D. When the purchaser makes payment
Statement I. In the case of premiums as a component of transaction price, cash received from customer during the redemption of premiums shall be accounted as deduction from the cost of premiums.Statement II. The transaction price for the sale of the product with premium is recorded as a liability for the performance obligation that will be settled by the transfer of the promised premium. A. Both statements are true. B. Both statements are false. C. statement I is true; Statement II is false. D. Statement I is false; Statement II is true.
3 In accounting for consignment sales, sales revenue and the related cost of goods sold should be recognized by the Group of answer choices Consignor when the goods are shipped to the consignee Consignee when cash is received from the customer Consignor when notification is received that the consignee has sold the goods Consignor when the goods are shipped to the third party
If the seller is paid after delivery of goods or services and the time value of money is viewed as significant, the seller subsequently will recognize interest expense. true or false 2. If the time value of money is viewed as significant and the seller recognizes deferred revenue, the seller subsequently also will recognize interest expense. true or false 3. If a seller makes payments to a customer to purchase goods or services, and those payments are equal to the stand-alone selling prices of those goods or services, part of those payments are a refund to the customer. true or false
Under the realization principle, revenue from sale of products is recognized a. At date of delivery to the customers C. When the customers are billed b. When the inventories are readied for shipment D. Upon receipt of cash payment
The revenue recognition principle requires retailers to recognise sales revenue when it is earned which is not necessarily at the same time that the cash is received. (T/F)
Identify whether each of the following transactions, which are related to revenue recognition, are accrual, deferral, or neither. a. sold goods to customers on credit b. collected cash from customer accounts c. sold goods to customers for cash d. collected cash in advance for goods to be delivered later

SEE MORE QUESTIONS

Recommended textbooks for you

College Accounting (Book Only): A Career Approach

Accounting

ISBN:

9781337280570

Author:

Scott, Cathy J.

Publisher:

South-Western College Pub

College Accounting (Book Only): A Career Approach

Accounting

ISBN:

9781305084087

Author:

Cathy J. Scott

Publisher:

Cengage Learning

Business/Professional Ethics Directors/Executives…

Accounting

ISBN:

9781337485913

Author:

BROOKS

Publisher:

Cengage

College Accounting (Book Only): A Career Approach

Accounting

ISBN:

9781337280570

Author:

Scott, Cathy J.

Publisher:

South-Western College Pub

College Accounting (Book Only): A Career Approach

Accounting

ISBN:

9781305084087

Author:

Cathy J. Scott

Publisher:

Cengage Learning

Business/Professional Ethics Directors/Executives…

Accounting

ISBN:

9781337485913

Author:

BROOKS

Publisher:

Cengage

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

Auditing: A Risk Based-Approach (MindTap Course L…

Accounting

ISBN:

9781337619455

Author:

Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS