To resolve inconsistencies and also weaknesses in revenue recognition, a an extensive revenue recognition standard was occurred entitled thea. Principle-based Revenue Accounting.b. Revenue from Contracts with Customers.c. Rules-based Revenue Accounting.d. Revenue recognition Principle.

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The first step in the procedure for revenue recognition is toa. Recognize the contract through customers.b. Recognize the transaction price.c. Clues transaction price to the separate performance obligations.d. Determine the different performance responsibilities in the contract.
The last step in the process for revenue recognition is toa. Recognize the transaction price.b. Recognize revenue as soon as each performance obligation is satisfied.c. Point out transaction price come the different performance obligations.d. Determine the contract with customers.
When many performance obligations exist in a contract, they have to be accounted for together a solitary performance duty whena. Both performance obligations are distinct yet interdependent.b. Each business is interdependent and also interrelated.c. The product is distinctive within the contract.d. Decision cannot be made.
A transaction price because that multiple power obligations need to be allocateda. Based upon selling price native the company"s competitors.b. Based on forecasted expense of satisfying performance obligation.c. Based on what the firm could market the products because that on a standalone basis.d. Based on total transaction price less residual value.
The cost-to-cost basis measures progress in the direction of completion bya. Comparing prices incurred to day with total costs to complete the contract.b. Tracking results of occupational completed to date; it is one output measure.c. Tracking floors the a building completed versus floors still to be completed.d. Tracking miles of a highway completed versus miles the highway quiet to be completed.
The usage of the net an approach of recognizing revenue by an agenta. Could an outcome in an overstatement the the agent"s revenue.b. Could result in an understatement of the agent"s revenue.c. Is proper as lengthy as both revenue and also costs space included.d. Is the correct an approach in a principal-agent relationship.
Consignments space a specialized marketing method whereby thea. Consignee takes possession the merchandise yet title remains with manufacturer.b. Consignee (agent) holds location to the product.c. Consignee purchases products for sale and also sends payment when items are sold.d. Consignee payment for great up front and is paid once was is sold.
When utilizing the portion of completion method, the companya. Establish revenues and gross profit only when the contract is completed.b. Accumulates development billings in an inventory account (Construction in Process).c. Recognizes revenues and gross benefit each duration throughout the contract.d. Accumulates construction costs just in an list account (Construction in Process).
Under the percentage-of-completion method, just how should the balances that Billings on building in procedure and building in process be reported before the perfect of a long-term contract?a. Billings on building and construction in procedure as a deferred revenue and also Construction in procedure as a deferred expense.b. Net, together revenue from building if a credit transaction balance, and also as a lose from building and construction if debit balance.c. Net, together a existing asset if a debit balance, and as a existing liability if a credit balance.d. Billings on building and construction in process as revenue and also building in process as inventory.
In audit for a irreversible construction-type contract making use of the percentage-of-completion method, the gross profit recognized throughout the first year would be the estimated full gross profit from the contract, multiply by the percentage of the expenses incurred throughout the year come thea. Full estimated cost.b. Complete costs incurred to date.c. Unbilled portion of the contract price.d. Complete contract price.
The Billings on construction in progression account is a(n)a. Contract revenue account.b. Contra-inventory account.c. Inventory account.d. Building and construction expense account.

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Under the completed-contract methoda. Revenue, cost, and gross profit are known during the production cycle.b. Revenue and also cost are recognized during the production cycle, however gross profit acknowledgment is deferred until the contract is completed.c. Revenue, cost, and also gross benefit are recognized at the moment the contract is completed.d. No one of these answers room correct.
Most revenue transactions pose couple of problems for revenue recognition because often the transaction is initiated and completed in ~ the exact same time.a. True b. False
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