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AccountingIntermediate Accounting: Reporting And Analysis3rd Edition

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Chapter 17, Problem 2C
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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
Problem 1GI
Problem 2GI
Problem 3GI
Problem 4GI
Problem 5GI
Problem 6GI
Problem 7GI
Problem 8GI
Problem 9GI
Problem 10GI
Problem 11GI
Problem 12GI
Problem 13GI
Problem 14GI
Problem 15GI
Problem 16GI
Problem 17GI
Problem 18GI
Problem 19GI
Problem 20GI
Problem 21GI
Problem 22GI
Problem 23GI
Problem 24GI
Problem 25GI
Problem 1MC
Problem 2MC
Problem 3MC
Problem 4MC
Problem 5MC
Problem 6MC
Problem 7MC
Problem 9MC
Problem 10MC
Problem 1RE
Problem 2RE
Problem 3RE
Problem 4RE
Problem 5RE
Problem 6RE
Problem 7RE
Problem 8RE
Problem 9RE
Problem 10RE
Problem 11RE
Problem 12RE
Problem 13RE
Problem 14RE
Problem 15RE
Problem 16RE
Problem 17RE
Problem 18RE
Problem 19RE
Problem 1E
Problem 2E
Problem 3E
Problem 4E
Problem 5E
Problem 6E
Problem 7E
Problem 8E
Problem 9E
Problem 10E
Problem 11E
Problem 12E
Problem 13E
Problem 14E
Problem 15E
Problem 16E
Problem 17E
Problem 18E
Problem 19E
Problem 20E
Problem 21E
Problem 22E
Problem 23E
Problem 24E
Problem 25E
Problem 26E
Problem 1P
Problem 2P
Problem 3P
Problem 4P
Problem 5P
Problem 6P
Problem 7P
Problem 8P
Problem 9P
Problem 10P
Problem 11P
Problem 1C
Problem 2C
Problem 3C
Problem 4C
Problem 5C
Problem 6C
Problem 7C
Problem 8C
Problem 9C
Problem 10C
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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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?

To determine

Discuss the criteria required for a contract to be considered under the revenue recognition process and explain the manner in which the company will account for a contract that does not meet the criteria.

Explanation

Contract:

Contract is an agreement among two parties or more parties which includes enforceable obligations and rights. A contract can be written, oral or implied by ordinary business practices.

Criteria that company must apply to revenue recognition standards to contracts are as follows:

  • Parties to the agreement must accept the contract either in written form, orally, or by implication.
  • The company must be able to recognize the rights of each party with respect to goods and services transferred.
  • The company must be able to recognize terms of payment with respect to goods and services transferred. This does not imply that the transaction price must be fixed or explicitly stated. In fact, the price of transaction can differ due to discount or rebates.
  • The contract must have commercial substance which means that the contract should change the amount, timing or possibility of the company’s future cash flows...

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Ch-17 P-1GICh-17 P-2GICh-17 P-3GICh-17 P-4GICh-17 P-5GICh-17 P-6GICh-17 P-7GICh-17 P-8GICh-17 P-9GICh-17 P-10GI
Ch-17 P-11GICh-17 P-12GICh-17 P-13GICh-17 P-14GICh-17 P-15GICh-17 P-16GICh-17 P-17GICh-17 P-18GICh-17 P-19GICh-17 P-20GICh-17 P-21GICh-17 P-22GICh-17 P-23GICh-17 P-24GICh-17 P-25GICh-17 P-1MCCh-17 P-2MCCh-17 P-3MCCh-17 P-4MCCh-17 P-5MCCh-17 P-6MCCh-17 P-7MCCh-17 P-9MCCh-17 P-10MCCh-17 P-1RECh-17 P-2RECh-17 P-3RECh-17 P-4RECh-17 P-5RECh-17 P-6RECh-17 P-7RECh-17 P-8RECh-17 P-9RECh-17 P-10RECh-17 P-11RECh-17 P-12RECh-17 P-13RECh-17 P-14RECh-17 P-15RECh-17 P-16RECh-17 P-17RECh-17 P-18RECh-17 P-19RECh-17 P-1ECh-17 P-2ECh-17 P-3ECh-17 P-4ECh-17 P-5ECh-17 P-6ECh-17 P-7ECh-17 P-8ECh-17 P-9ECh-17 P-10ECh-17 P-11ECh-17 P-12ECh-17 P-13ECh-17 P-14ECh-17 P-15ECh-17 P-16ECh-17 P-17ECh-17 P-18ECh-17 P-19ECh-17 P-20ECh-17 P-21ECh-17 P-22ECh-17 P-23ECh-17 P-24ECh-17 P-25ECh-17 P-26ECh-17 P-1PCh-17 P-2PCh-17 P-3PCh-17 P-4PCh-17 P-5PCh-17 P-6PCh-17 P-7PCh-17 P-8PCh-17 P-9PCh-17 P-10PCh-17 P-11PCh-17 P-1CCh-17 P-2CCh-17 P-3CCh-17 P-4CCh-17 P-5CCh-17 P-6CCh-17 P-7CCh-17 P-8CCh-17 P-9CCh-17 P-10C

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