Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 11, Problem 36FOQ
Under SEC rules, which of the following is not among the criteria that ordinarily exist for revenue to be recognized?
- (1) Collectibility is reasonably assured.
- (2) Delivery has occurred or is scheduled to occur in the near future.
- (3) Persuasive evidence of an arrangement exists.
- (4) The seller’s price to the buyer is fixed or determinable.
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Under PFRS 15, what is the measurement basis of revenue from contracts with customers? Select the correct letter:
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(Recognition of Revenue—Theory) Revenue is usually recognized at the point of sale (a point in time). Under special circumstances, however, bases other than the point of sale are used for the timing of revenue recognition.Instructions(a) Why is the point of sale usually used as the basis for the timing of revenue recognition?(b) Disregarding the special circumstances when bases other than the point of sale are used, discuss the merits of each of the following objections to the point-of-sale basis of revenue recognition:(1) It is too conservative because revenue is earned throughout the entire process of production.(2) It is not conservative enough because accounts receivable do not represent disposable funds, sales returns and allowances may be made, and collection and bad debt expenses may be incurred in a later period.(c) Revenue may also be recognized over time. Give an example of the circumstances in which revenue is recognized over time and accounting merits of its use instead of…
Under PFRS 15, when shall a consignor recognize revenue from its consignment sales?
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Chapter 11 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 11 - Explain the difference between a customers order...Ch. 11 - Prob. 2RQCh. 11 - Prob. 3RQCh. 11 - State briefly the objective of the billing...Ch. 11 - Prob. 5RQCh. 11 - Prob. 6RQCh. 11 - Prob. 7RQCh. 11 - Prob. 8RQCh. 11 - Prob. 9RQCh. 11 - Prob. 10RQ
Ch. 11 - Prob. 11RQCh. 11 - Prob. 12RQCh. 11 - Prob. 13RQCh. 11 - Prob. 14RQCh. 11 - Prob. 15RQCh. 11 - Prob. 16RQCh. 11 - Prob. 17RQCh. 11 - Prob. 18RQCh. 11 - Prob. 19RQCh. 11 - Prob. 20RQCh. 11 - Prob. 21RQCh. 11 - Prob. 22RQCh. 11 - Give an example of a type of receivable...Ch. 11 - Prob. 24RQCh. 11 - Prob. 25QRACh. 11 - Prob. 26QRACh. 11 - Prob. 27QRACh. 11 - Prob. 28QRACh. 11 - Prob. 29QRACh. 11 - Prob. 30QRACh. 11 - Prob. 31QRACh. 11 - Prob. 32QRACh. 11 - Prob. 33QRACh. 11 - Prob. 34QRACh. 11 - Prob. 35QRACh. 11 - Prob. 36AOQCh. 11 - Which of the following would provide the most...Ch. 11 - Prob. 36COQCh. 11 - Prob. 36DOQCh. 11 - Prob. 36EOQCh. 11 - Under SEC rules, which of the following is not...Ch. 11 - Prob. 36GOQCh. 11 - Prob. 36HOQCh. 11 - Prob. 36IOQCh. 11 - Prob. 36JOQCh. 11 - Prob. 36KOQCh. 11 - Prob. 36LOQCh. 11 - Prob. 37OQCh. 11 - Prob. 38OQCh. 11 - An auditors working papers include the following...Ch. 11 - Prob. 40OQCh. 11 - Prob. 41OQCh. 11 - Prob. 42OQCh. 11 - Prob. 43OQCh. 11 - Prob. 44PCh. 11 - Prob. 45PCh. 11 - Prob. 46PCh. 11 - Prob. 47PCh. 11 - The July 31, 20X0, general ledger trial balance of...Ch. 11 - Prob. 49ITCCh. 11 - Prob. 50ECCh. 11 - Prob. 51EC
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- (Fundamentals of Revenue Recognition) Respond to the questions related to the following statements.1. A wholly unperformed contract is one in which the company has neither transferred the promised goods or services to the customer nor received, or become entitled to receive, any consideration. Why are these contracts not recorded in the accounts?2. Performance obligations are the unit of account for purposes of applying the revenue recognition standard and therefore determine when and how revenue is recognized. Is this statement correct?3. Elaina Company contracts with a customer and provides the customer with an option to purchase additional goods for free or at a discount. Should Elaina Company account for this option?4. The transaction price is generally not adjusted to reflect the customer’s credit risk, meaning the risk that the customer will not pay the amount to which the entity is entitled to under the contract. Comment on this statement.arrow_forwardRevenue is usually recognized at the point of sale (a point in time). Under special circumstances, however, bases other than the point of sale are used for the timing of revenue recognition. Instructions a. Why is the point of sale usually used as the basis for the timing of revenue recognition? b. Disregarding the special circumstances when bases other than the point of sale are used, discuss the merits of each of the following objections to the point-of-sale basis of revenue recognition: 1. It is too conservative because revenue is earned throughout the entire process of production. 2. It is not conservative enough because accounts receivable do not represent disposable funds, sales returns and allowances may be made, and collection and bad debt expenses may be incurred in a later period. c. Revenue may also be recognized over time. Give an example of the circumstances in which revenue is recognized over time and accounting merits of its use instead of the point-of-sale…arrow_forwardRevenue can be recognized when all of the following criterias are met EXCEPT There is credible evidence that an arrangement exists. Goods have been delivered or services have been performed. The selling price or fee to the buyer is fixed or can be reasonably determined. All of these are correctarrow_forward
- Under IFRS, revenue from barter transactions should be measured based on the fair value of revenue from: B . similar non-barter transactions with related partiesarrow_forwardTRUE OR FALSE. If the statement is INCORRECT, explain why the statement is INCORRECT. 1. Under CIF, the seller agrees to pay in lump sum or installment, the cost of the goods, insurance and freight charges.arrow_forwardWhich of the following statements is true regarding contracts in ASC Topic 606 guidance for revenue recognition? Contracts need to be legally enforceable to be considered under ASC Topic 606. Contracts need to be in written form to be considered under ASC Topic 606. No consideration can be received before a contract exists. No price concessions can be made to an existing contract.arrow_forward
- Which of the following arises when the seller's right to consideration from a customer is conditional upon something other than the passage of time? A receivable A contract asset A contract liability None of these choicesarrow_forwardIf 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)?arrow_forwardThe amount of consideration to which the entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties" is the definition of Select one: O a. the contract. O b. the performance obligation. O c. the transaction price. - O d. the consideration.arrow_forward
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