Why in franchise arrangements may it be improper torecognize the entire franchise fee as revenue at the dateof sale?
Q: Continuing franchise fees should be recognized O over time depending on the revenue recognition…
A: Revenue - The amount of money received by a company during a specific period as a result of the…
Q: Can a member who contributed an asset demand for its return, transfer or conveyance upon dissolution…
A:
Q: Would the sale be on an underwritten or bestefforts basis?
A: It is one of the most significant capacities in the money related world wherein an individual or a…
Q: Which of the following accounting treatments for costs related to business combination is incorrect?…
A: Costs associated to the establishment of the newly created corporation, also known as…
Q: If a loss from sale or exchange of property between related parties is disallowed and the property…
A: If a loss from sale or exchange of property between related parties is disallowed and the property…
Q: The current PFRSS do not address the aCcounting for revenues from franchise contracts.
A: Answer: As per Bartleby guidelines, first question has been answered unless mentioned for specific…
Q: Which of the following is a characteristic of tax? b. a. The amount to be collected is limited to…
A: Here discuss about the details of the characteristic of the taxes as well. There are some district…
Q: When do companies break apart a sale and treat its parts differently for purposes of recognizing…
A: Earlier, the concept of revenue recognition was not properly framed and it created problems on the…
Q: Under PFRS 15, when shall a franchisor recognizes revenue from its contingent franchise fee, also…
A: There are certain specific cases when a franchisor or recognizes revenue from contingent franchise…
Q: Allied Appliances, Inc., changed its revenue recognition policies. Which characteristic is…
A: Accounting Principle: They are the general rules and guidelines to be followed by companies in…
Q: Exclusion from gross income refers to income received or earned but is not taxable as income because…
A: Gross income is the total income of an individual without deducting any deductions or exemptions. It…
Q: contingency that need not be disclosed in the financial statements
A: Contingency is the probable obligation or receivable that may arise in future which depends on the…
Q: Why should executory contracts be disclosed in the financial statements? Group of answer choices…
A: Executory contracts are contracts under which neither party has performed any of its obligations or…
Q: In a wash sale, a loss is not deductible. Group of answer choices True False
A: The question is related Wash Sale loss. As per Internal Service Revenue (IRS) the wash sale rule is…
Q: This transfer of financial asset does not result to derecognition. A. The transferred asset has…
A: Assets: Assets are resources (property) presented in the balance sheet because for it an…
Q: What was viewed as a major criticism of GAAP as it relates to revenue recognition?
A: GAAP: GAAP (Generally Accepted Accounting Principles) is the standard guidelines, which is commonly…
Q: 1. PFRS does not address the accounting for revenue from franchise agreements 2. Under the current…
A: Here student asked for multi question as per Q/A guidelines we will solve for first question for…
Q: 4. Under PFRS 15, when shall a franchisor recognize revenue from contingent franchise fee or revenue…
A: A franchise or sales based royalty is type of license in which franchisor gives access to…
Q: S1] Under the current PPRS, a franchisor recognizes the initial franchise fee as revenue in full at…
A: Here asked for multi question we will solve for first question for you according to guidelines. If…
Q: Identify which statement is incorrect: Sale of goods or services by any person or entity may…
A: Tax is the amount of duty payable to government upon the happening of certain business transactions,…
Q: Te election to expenses is not permitted where listed property does not meet the qualified business…
A: Qualified business use refers to any use of the asset in the taxpayer’s trade or business which is…
Q: The gain/loss related to a sale and leaseback transaction not recognized by the seller-lessee in its…
A: Rights retained .. The gain or the loss relating to a sale and leaseback transaction not recognized…
Q: When the franchisor supplies equipments and inventories without a reasonable profit, part of the…
A: Solution: As per the provisions, The franchise agreement may include terms where franchisor is to…
Q: Sale transactions between the home office and its branch are taxable because the home office and the…
A: A branch office consists of smaller divisions of different aspects of the company and therefore a…
Q: rationale for recognizing revenue over the life of a contract rather than at a single point in time…
A: Revenue refers to the sum of money generated by an individual or any business entity through its…
Q: Which of the following statements regarding the accounting for business combinations is false?…
A: Although goodwill is the difference between the consideration transferred by the acquirer to the…
Q: When should revenue be recognised? Are there exceptions to the general rule?
A: Introduction: Revenue is computed by adding the average sales price by the number of units sold. Net…
Q: Which of the following does not belong to the group? Broker's commission Transfer tax…
A: The term Cost of disposal refers to the additional expense that are incurred or to be incurred for…
Q: Which of the following accounting treatments for costs related to business combination is incorrect?…
A: The cost related to business corporation, also known as pre incorporation expenditure, are treated…
Q: Which of the following would most likely be considered as a separate performance obligation in…
A: A performance obligation is satisfied by transferring a promised good or service to a customer. In a…
Q: Sale of goods or services by any person or entity may result to the payment of income tax.
A: Option a is wrong because sale of goods or services itself does not result in the payment of income…
Q: When a company sells an asset and simultaneously leases it back, what criteria must be met to apply…
A: Sale-Leaseback approach: In the sale-leaseback approach, the owner of the leased asset sells it…
Q: A contingent liability assumed in a business combination: a. Is not accounted for by the acquirer…
A: Contingent liability: The contingent liability is not treated as a liability of the company on the…
Q: What are the arguments for giving separate accountingrecognition to the conversion feature of…
A: The separate accounting for recognition is needed as convertible debenture has the feature of…
Q: A temporary difference which would result in a deferred tax liability is a) installment sale…
A: Definition: Deferred tax liability:- It is the liability of tax that a business has yet not paid in…
Q: Which of the following is not a sale and therefore is not subject to the value-added tax?…
A: The correct option with proper explanation are as follows.
Q: Briefly Discuss the basis for Revenue Recognition of the Franchise
A: Franchise arrangement and performance obligation: In a franchise transaction, the franchisor has…
Q: Income of on-line sellers are generally taxable. True or false?
A: online seller buys products and then sells them to generate profit. Online sellers can sell just…
Q: The sale and distribution of the assets of a business on its termination is Group of answer choices…
A: Answer is liquidation
Q: Sale of real estate is subject to VAT. True, if not made in the regular course of trade or…
A: Answer:- VAT definition:- A value-added tax (VAT), is a form of that that is levied gradually. It…
Q: A trustee for a company that is being liquidated voids a preference transfer. What has happened, and…
A:
Q: 1. What are the accounting rules for determining whether to expense certain costs against revenue…
A: Generally Accepted Accounting Principles-: Generally Accepted Accounting Principles (GAAP) is a…
Q: Which of the following is a temporary difference that normally is recognized for accounting purposes…
A: Temporary difference is the difference between when the revenue and expenses are reported for…
Q: Franchise revenue are recognized over time if: a. Franchise rights are transferred with a right to…
A: This question deals with the revenue recognition of franchise. In franchise revenue, revenue needs…
Why in franchise arrangements may it be improper to
recognize the entire franchise fee as revenue at the date
of sale?
Step by step
Solved in 2 steps
- True or False According to PFRS 15, if an entity expects that a portion of giftcertificates sold will not be redeemed, the entity recognizes theexpected breakage amount as revenue in proportion to the pattern of rights exercised by customerHow does unearned revenue arise? Why can it be classifiedproperly as a current liability? Give several examplesof business activities that result in unearned revenues.When do companies break apart a sale and treat its parts differently for purposes of recognizing revenue?
- 12 Under PFRS 15, when shall a franchisor recognizes revenue from its contingent franchise fee, also known as sales-based royalty revenue? Group of answer choices When the franchisor satisfies the performance obligation in relation to the initial franchise fee based on the accounting estimate using historical evidence When the sales of the franchisee occur When the franchisee signs the document evidencing the franchise agreement When the franchisor collected the nonrefundable upfront feeIf an entity recognises the revenue associated with a contract with a customer over time (rather than at a point in time), would this approach be considered more conservative than an approach that defers profit recognition until the completion of the contract (that is, at a future point in time)?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.
- Under PFRS 15, in which of the following instances will the revenue from contracts with customers be recognized at a point in time instead of over time? Group of answer choices When the entity’s performance creates or enhances an asset that the customer controls as the asset is created. When the customer simultaneously receives and consumes all of the benefits provided by the entity as the entity performs. When the entity has transferred physical possession and legal title to the asset to the customer When the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date.Exclusion from gross income refers to income received or earned but is nottaxable as income because it is exempted by law or by treaty. TRUE OR FALSE?Which of the following is a temporary difference that normally is recognized for accounting purposes before being reported as an expense for tax purposes? Unearned revenue Product warranty costs Depreciation Fines resulting from violations of the law.
- When a company sells an asset and simultaneously leases it back, what criteria must be met to apply saleleaseback accounting rather than accounting for the transaction as a loan ?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 receivableIf an entity has elected to use the fair value option for a financial liability; a. It is measured at fair value through other comprehensive income. b. It is measured at fair value through profit or loss. c. It is measured at amortized cost. d. Fair value op don is prohibited for financial liabilities.