ZuoTi.Pro
Question

Which of the following statements is true regarding contracts in ASC Topic 606 guidance for revenue...

Which of the following statements is true regarding contracts in ASC Topic 606 guidance for revenue recognition?

a. Contracts need to be legally enforceable to be considered under ASC Topic 606.

b. Contracts need to be in written form to be considered under ASC Topic 606.

c. No consideration can be received before a contract exists.

d. No price concessions can be made to an existing contract.

PLEASE EXPLAIN!

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

As per ASC 606:-

a. Contracts can be established through various mediums: written, oral, or implied by an entity’s customary business practices.Implied promises are considered part of a contract under ASC 606 if the customer has a reasonable expectation, based on the vendor’s past practices that are part of what was negotiated.

b. Consideration can be received in advance and performance obligation can be made afterwards after a contract exist and not  before the contract exist.

c. Concession or discounting terms can be mentioned in contract terms for early payment or bulk discount.

After taking into account the above explanation to ASC 606 ,statement a is right.

0 1
Add a comment
Know the answer?
Add Answer to:
Which of the following statements is true regarding contracts in ASC Topic 606 guidance for revenue...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 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...

  • Which of the following is not a necessary condition for a firm to account for a...

    Which of the following is not a necessary condition for a firm to account for a customer contract under the ASC Topic 606 guidance for revenue recognition? Multiple Choice A. Payment terms may not include a variable component. B. The rights of each party can be identified. C. The contract has commercial substance. D. Collection is probable.

  • Which of the following is a true statement? Multiple Choice Expenses increase owners’ equity and decrease...

    Which of the following is a true statement? Multiple Choice Expenses increase owners’ equity and decrease liabilities. Revenue decreases owners’ equity and expenses increase owners’ equity. Revenue increases owners’ equity and expenses decrease owners’ equity. Revenue decreases owners’ equity and increases liabilities. Which of the following statements is not true regarding the adoption of ASC Topic 606 guidance for revenue recognition? Multiple Choice When using the cumulative approach, the prior three years of financial statements need to be restated. Under...

  • . b. Identify which of the following statements are true regarding Revenue Rulings and Revenue Procedures....

    . b. Identify which of the following statements are true regarding Revenue Rulings and Revenue Procedures. Select "Yes" or "No" whichever is applicable. • Revenue Procedures deal with the internal management practices and requirements of the IRS. • Revenue Rulings typically provide one or more examples of how the IRS would apply a law to specific fact situations. Revenue Procedures can increase taxpayer compliance and assist the efficient administration of the . tax law by the IRS. • Revenue Procedures...

  • Which of the following is true about revenue recognition under ASU 2014-09? Multiple Choice The realization...

    Which of the following is true about revenue recognition under ASU 2014-09? Multiple Choice The realization principle guides the ASU. Construction contracts are typically broken into the various separate goods and services that are included in them for purposes of revenue recognition. The time value of money is considered when estimating all transaction prices. Collectibility of the receivable is considered when determining whether revenue can be recognized.

  • Problem 3-3 Revenue recognition over time and at a point in time under ASC Topic 606...

    Problem 3-3 Revenue recognition over time and at a point in time under ASC Topic 606 (LO3-4) MSK Construction Company contracted to construct a factory building for $525,000. Construction started during 2019 and was completed in 2020. Information relating to the contract follows: 2020 $150,000 Costs incurred during the year Estimated additional cost to complete Billings during the year Cash collections during the year 2019 $290,000 145,000 260,000 240,000 265,000 285,000 Required: 1. Record the preceding transactions in MSK's books...

  • Which of the following statements is true regarding positive child guidance? A) Planning for positive child...

    Which of the following statements is true regarding positive child guidance? A) Planning for positive child guidance should not rely only on strategies for external control but instead should support the child's naturally unfolding motivation for self-control. B) All of the responses are correct. C) The role of the adult is one who seeks not to gain control over the children but rather to guide them effectively while setting for them a first-hand example of appropriate coping and communication. D)...

  • 1.Under a consignment arrangement, revenue is not recognized until the consigned goods are sold to a...

    1.Under a consignment arrangement, revenue is not recognized until the consigned goods are sold to a third party. True or False 2. Amounts received from the sale of gift cards should be recognized by the seller at the time of sale.--True or False 3. Ann Smith just saw her doctor. After the appointment, she was informed by the receptionist that the fee for the visit is $75 and that her insurance company will be billed for the visit. Ann was...

  • Business Law Questions I need help on, not sure if the first few are correct or...

    Business Law Questions I need help on, not sure if the first few are correct or not. It is more of a Business Law Questions These questions are either true or false. NAME True TRUE OR FALSE (2 Points Each) . In order to be legally valid, a contract must be in writing 2. A valid contract is one that meets all of the requirements of a enforceable contract. 3. An implied contract is formed by conduct nel 7 ....

  • Which of the following statements regarding price elasticity of demand is true? O The revenue for...

    Which of the following statements regarding price elasticity of demand is true? O The revenue for a product's sales is maximized where price elasticity = -1 because this is where changes in unit sales and unit price exactly offset each other O The revenue for a product's sales is maximized where price elasticity= -1 because this is where the quantity sales and market share are maximized O The revenue for a product's sales is maximized where price elasticity is less...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT