what are the ramifications off recognizing revenues too soon? (recognizing revenue when orders are received but...
Homework Answers
Revenue is to be recognized only when the control and risk and rewards of the product or service is transferred to the buyer. In accrual method, when orders are shipped, the revenue is recognized.
If the revenue is recognized too early , that is before they are shipped, it results into overstating of revenue and profit. Also, it is violation of accounting principle and standards, and it leads to fraud for glorifying the financial statements fraudulently. This leads to legal consequences.
If this material misstatement is not corrected at the right time, it continues over subsequent financial periods.
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what are the ramifications off recognizing revenues too soon?
(recognizing revenue when orders are received but...
what are the ramifications off recognizing revenues too soon? (recognizing revenue when orders are received but...
what are the ramifications off recognizing revenues too soon? (recognizing revenue when orders are received but before they are shipped ?
what are the ramifications off recognizing revenues too soon? (recognizing revenues are received but before they are sh...
what are the ramifications off recognizing revenues too soon? (recognizing revenues are received but before they are shipped)
Recognizing a loan received as revenue instead of as a liability has a positive effect on the reported financial statem...
Recognizing a loan received as revenue instead of as a liability has a positive effect on the reported financial statements for all of the following except: ) it understates liabilities. It understates expenses. It overstates revenues, It overstates net income.
The approach to preparing financial statements based on recognizing revenues when they are earned and matching...
The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is: The operating cycle of a business The revenue recognition principle The matching principle Accrual basis accounting Cash basis accounting
what are so disadvantages or risk of recognizing revenue when a contract does not exist
what are so disadvantages or risk of recognizing revenue when a contract does not exist
1- Under IFRS, which of the following is generally not a guideline for recognizing revenue? The...
1- Under IFRS, which of the following is generally
not a guideline for recognizing revenue?
The transaction price is determinable.
When (or as) the company satisfies the performance
obligation.
The contract is identified with the client.
Collection is reasonably assured.
2- If Bee Corp. fails to adjust the Unearned Rent account for
rent that has been earned, what effect will this have on that
month’s financial statements?
Liabilities will be understated and revenues will be
understated.
Assets will be understated...
a. When a hotel's room revenue forecasts are consistently and unrealistically too low they... A. cause...
a. When a hotel's room revenue forecasts are consistently and unrealistically too low they... A. cause unrealistic high profit expectations by the hotel's owners. B. result in over-aggressive room rate determinations and rates that are set too high. C. result in under-aggressive room rate determinations and rates that are set too low. D. produce budgeting / spending errors by overstating anticipated revenues. b. A restaurant manager served 3,000 guests last January. For this coming January, they predict a decrease in...
Unearned revenues are generally Multiple Choice 0 Liabilities created when a customer pays in advance for...
Unearned revenues are generally Multiple Choice 0 Liabilities created when a customer pays in advance for products or services before the revenue is earned. 0 Revenues that have been earned and received in cash. 0 Revenues that have been earned but not yet collected in cash 0 Increases to owners' capital
What is the purpose of the accrual basis of accounting? Multiple Choice Recognize revenue when it...
What is the purpose of the accrual basis of accounting? Multiple Choice Recognize revenue when it is collected from customers. Match assets with liabilities during the proper accounting period. Recognize expenses when cash disbursements are made. Recognizing revenue when it is earned and expenses when they are incurred, regardless of when cash changes hands.
According to the revenue recognition principle, revenues should be recognized when they are earned, which happens...
According to the revenue recognition principle, revenues should be recognized when they are earned, which happens when the company performs acts promised to the customer. For most businesses, this condition is met at the point of delivery of goods or services. The following transaotions occurred in September Required For each of the transactions, if revenue is to be recognized in September, indicate the amount. Amount Activity a. Gillespie Enterprises Inc. issued $25 million in new common stock Cal State University...
Recognizing a loan received as revenue instead of as a liability has a positive effect on the reported financial statements for all of the following except: ) it understates liabilities. It understates expenses. It overstates revenues, It overstates net income.
The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is: The operating cycle of a business The revenue recognition principle The matching principle Accrual basis accounting Cash basis accounting
1- Under IFRS, which of the following is generally
not a guideline for recognizing revenue?
The transaction price is determinable.
When (or as) the company satisfies the performance
obligation.
The contract is identified with the client.
Collection is reasonably assured.
2- If Bee Corp. fails to adjust the Unearned Rent account for
rent that has been earned, what effect will this have on that
month’s financial statements?
Liabilities will be understated and revenues will be
understated.
Assets will be understated...
Unearned revenues are generally Multiple Choice 0 Liabilities created when a customer pays in advance for products or services before the revenue is earned. 0 Revenues that have been earned and received in cash. 0 Revenues that have been earned but not yet collected in cash 0 Increases to owners' capital
What is the purpose of the accrual basis of accounting? Multiple Choice Recognize revenue when it is collected from customers. Match assets with liabilities during the proper accounting period. Recognize expenses when cash disbursements are made. Recognizing revenue when it is earned and expenses when they are incurred, regardless of when cash changes hands.
According to the revenue recognition principle, revenues should be recognized when they are earned, which happens when the company performs acts promised to the customer. For most businesses, this condition is met at the point of delivery of goods or services. The following transaotions occurred in September Required For each of the transactions, if revenue is to be recognized in September, indicate the amount. Amount Activity a. Gillespie Enterprises Inc. issued $25 million in new common stock Cal State University...
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