Which of the following best describes the current revenue recognition principle?Recognize revenue in the accounting period when the performance obligation is satisfied.Recognize revenue in the accounting period when cash is received.Recognize revenue when it is earned.Identify separate performance obligations in the contract.

Revenue means the amount earned by selling the goods or services. Revenue is recognized in books of…

Answered: Which of the following best describes…

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter9: Operating Activities

Section: Chapter Questions

Problem 5QE

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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?
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 principles matches expenses with associated revenues in the period in which the revenues were generated? A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principle
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.
Explain the revenue recognition process when a performance obligation is satisfied over time according to IFRS 15-Revenue from Contracts with Customers.
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.)
Explain the importance of a contract in the revenue recognitionprocess.
Which of the following is not included in the FASB's 5-step model for evaluating when a company should recognize revenue? Identify the contract with a customer. Identify the performance obligations in the contract. Determine the transaction price. Recognize revenue when cash payment is received.
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
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
Understand the disclosures required for revenue recognition, accounts receivable,contract assets, and contract liabilities

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