Homework Answers
The revenue recognition principle is a cornerstone of accrual accounting together with the matching principle. They both determine the accounting period in which revenues and expenses are recognized. According to the principle, revenues are recognized when they are realized or realizable, and are earned (usually when goods are transferred or services rendered), no matter when cash is received. In cash accounting – in contrast – revenues are recognized when cash is received no matter when goods or services are sold.
Cash can be received in an earlier or later period than obligations are met (when goods or services are delivered) and related revenues are recognized that results in the following two types of accounts:
Accrued revenue: Revenue is recognized before cash is
received.
Deferred revenue: Revenue is recognized after cash is received.
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B. (5%) Explain the Revenue Recognition Principle and provide a concise presentation of the most recent...
Explain the Revenue Recognition Principle and provide a concise presentation of the most recent approaches regarding...
Explain the Revenue Recognition Principle and provide a concise presentation of the most recent approaches regarding its content and application. (word limit, 500 words).
Explain the Revenue Recognition Principle and provide a concise presentation of the most recent approaches regarding...
Explain the Revenue Recognition Principle and provide a concise presentation of the most recent approaches regarding its content and application. (word limit, 500 words)
Select ONE of the questions below and provide a response. 1. Describe the revenue recognition principle....
Select ONE of the questions below and provide a response. 1. Describe the revenue recognition principle. 2. Identify the five steps in the revenue recognition process. 3. Explain the importance of a contract in revenue recognition process. 4. What is the nature of a sale on consignment.
A. (2096) ABC Corporation sells industrial equipment. The equipment can be sold independently or combined with...
A. (2096) ABC Corporation sells industrial equipment. The equipment can be sold independently or combined with maintenance service. In addition, ABC provides maintenance service independently from the sale of the equipment During 2019 the following transactions take place: 1. On January 15, 175 pieces of equipment are sold. The selling price of the equipment is €5,000 per unit, while the acquisition cost of equipment to ABC is €2,200 per unit. 2. On Mach 1, 240 pieces of equipment combined with...
B. (5%) Explain the specific identification cost inventory method and compare it with cash-flow methods of...
B. (5%) Explain the specific identification cost inventory method and compare it with cash-flow methods of FIFO and weighted-average cost. Discuss the effect of each method on assets valuation and income. (word limit: 500 words)
. Match accounting assumption with most appropriate statement. A. Time Period F. Expense Recognition B. Materiality...
. Match accounting assumption with most appropriate statement. A. Time Period F. Expense Recognition B. Materiality G. Consistency C. Going Concern H. Full Disclosure D. E. Revenue Recognition Business Entity I. Transaction Approach J. Historical Cost Insert the applicable letter below i. Land is purchased for $760,000. The current value of the land is $625,000. Which concept is applied to record the correct amount? ii. Wall Street Journal: subscription fees collected in advance are recorded as unearned subscription income...
E5-33. Assessing Revenue Recognition Timing Explain when each of the following businesses fulfills the performance obligations...
E5-33. Assessing Revenue Recognition Timing Explain when each of the following businesses fulfills the performance obligations implicit in the sales contract. a. A clothing retailer like American Eagle Outfitters Inc. b. A contractor like Raytheon Company that performs work under long-term government contracts. c. A grocery store like Supervalu Inc. d. A producer of television shows like MTV that syndicates its content to television stations. e. A residential real estate developer that constructs only speculative houses and later sells these...
5. How is materiality (or immateriality) related to the proper presentation of financial statements? What factors...
5. How is materiality (or immateriality) related to the proper presentation of financial statements? What factors and measures should be considered in assessing the material- ity of a misstatement in the presentation of a financial statement? 6. What are the enhancing qualities of the qualitative charac- teristics? What is the role of enhancing qualities in the conceptual framework? 7. According to the FASB conceptual framework, the objec- tive of financial reporting for business enterprises is based on the needs of...
1.Which of the following statements is true regarding the new ASC Topic 606 for revenue recognition?...
1.Which of the following statements is true regarding the new ASC Topic 606 for revenue recognition? Multiple Choice The focus is on when the firm has earned the consideration to which it is entitled. Early adoption is not allowed. The new rules are more rules-based than principle-oriented. Under IFRS, both public and non-public firms must adopt by 2018 2.Assuming the requirements for recognizing revenue over time are met, the measure of completion is computed by dividing Multiple Choice profits earned...
Slide 8 chapter 01: Accounting in Business Explain generally accepted accounting principles and d...
Slide 8 chapter 01: Accounting in Business Explain generally accepted accounting principles and define and apply several accounting principles Knowledge Check 03 Before we move on, quiz yourself to test your understanding Question 1 of 2 The private-sector organization that is primarily responsible for developing GAAP for use by all U.S. companies is the: O SEC O IASB O FASB O IFRS submit answer& continue Slide 9 chapter 01: Accounting in Business Explain generally accepted accounting principles and define and...
Select ONE of the questions below and provide a response. 1. Describe the revenue recognition principle. 2. Identify the five steps in the revenue recognition process. 3. Explain the importance of a contract in revenue recognition process. 4. What is the nature of a sale on consignment.
A. (2096) ABC Corporation sells industrial equipment. The equipment can be sold independently or combined with maintenance service. In addition, ABC provides maintenance service independently from the sale of the equipment During 2019 the following transactions take place: 1. On January 15, 175 pieces of equipment are sold. The selling price of the equipment is €5,000 per unit, while the acquisition cost of equipment to ABC is €2,200 per unit. 2. On Mach 1, 240 pieces of equipment combined with...
B. (5%) Explain the specific identification cost inventory method and compare it with cash-flow methods of FIFO and weighted-average cost. Discuss the effect of each method on assets valuation and income. (word limit: 500 words)
E5-33. Assessing Revenue Recognition Timing Explain when each of the following businesses fulfills the performance obligations implicit in the sales contract. a. A clothing retailer like American Eagle Outfitters Inc. b. A contractor like Raytheon Company that performs work under long-term government contracts. c. A grocery store like Supervalu Inc. d. A producer of television shows like MTV that syndicates its content to television stations. e. A residential real estate developer that constructs only speculative houses and later sells these...
5. How is materiality (or immateriality) related to the proper presentation of financial statements? What factors and measures should be considered in assessing the material- ity of a misstatement in the presentation of a financial statement? 6. What are the enhancing qualities of the qualitative charac- teristics? What is the role of enhancing qualities in the conceptual framework? 7. According to the FASB conceptual framework, the objec- tive of financial reporting for business enterprises is based on the needs of...
Slide 8 chapter 01: Accounting in Business Explain generally accepted accounting principles and define and apply several accounting principles Knowledge Check 03 Before we move on, quiz yourself to test your understanding Question 1 of 2 The private-sector organization that is primarily responsible for developing GAAP for use by all U.S. companies is the: O SEC O IASB O FASB O IFRS submit answer& continue Slide 9 chapter 01: Accounting in Business Explain generally accepted accounting principles and define and...
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