Question

Quick multiple choice accounting questions. I will rate if all answered thank you!

Exceptions to the realization principle include the installment basis of revenue recognition for sales revenue and the completed-contract method for long-term construction projects Select one True False At the end of the accounting period, three trial balances are prepared. Select one: O True O False The conceptual framework project resulted in identifying two primary qualitative characteristics that accounting information should possess relevance and reliability Select one True O False The underlying assumptions of accounting includes all the following except: Select one or more: a. Going concern. b. Money measurement and periodicity c. Business entity d. Matching Which of the following statements is false regarding the revenue recognition principle? Select one or more a Some small companies use the cash basis of accounting Ob Under the installment basis, the gross margin recognized in a period is equal to the amount of cash received from instaliment sales times the gross margin percentage for the year of sale c The accountant usually recognizes revenue before the seller acquires the right to receive payment from the buyer d. Revenue must be substantially earned before it is recognized

Answer 1

1. False.

In realization method , the revenue is recognized after the underlying goods or service have been delivered. In both the methods (construction contract and installment method) revenue is recognized after goods delivered and construction is completed. Hence they are not the exception.

2. True.

The three trial balances are 1. Unadjusted 2. Adjusted 3. Post closing

3. True.

Relevance and reliability are two primary qualities.

4. Answer is option D. Matching concept.

Because this assumption is not valid if cash recording method is used.

5. Answer is option C. Unless the right to receive payment is acquired, revenue is not recognized.

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