When multiple questions being asked, as a rule, only One (1)
question can be answered at a time. In case no specific question is
requested (maximum of 1), the first question is itself only
answered.
Kindly post the other questions individually separately.
Q: Revenue is recognized when:
Appropriate response: (d) The earning process is complete, and a valid promise of payment has been received.
Justification: Revenue recognition is a generally accepted
accounting principle (GAAP), therefore specific conditions have
been identified, on the basis of which revenue is recognized.
Thus, three major conditions are required to be fulfilled for
revenue to be recognized:
Therefore, from the above it is clear that option (d) is the most appropriate.
Ruling out of other options:
(a) marketability and market price are assured: under this, the
critical event is assured, but it has not occurred. Further, only
the market price is assured, but there is no certainty that it will
be collectible. Therefore, it is not the appropriate
response.
(b) Contractual agreement exists and cash collection is assured:
under this, the critical event is existing, however, it has not yet
occurred. Therefore, it is not the appropriate response.
(c) all related expenses have been incurred: under this it is
unclear if the critical event has occurred, and about the certainty
of collection. Therefore, it is not the appropriate response.
ITS8h2 Name: Issourcisse Quiz 3B Directions: Circle the best answers. Use PENCIL only else you will...
1. Under the general rule of revenue recognition, revenue is recognized when a marketability and market price are assured. b. a contractual agreement exists, and cash collection is assured. C./ all related expenses have been incurred. the earnings process is complete, and a valid promise of payment has been received 2. Which of the following is NOT an acceptable basis for the recognition of expenses? Cal Direct matching 6. Cash disbursement C. Immediate recognition d. Systematic and rational allocation 3....
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Please Help ASAP!! Problem 2: Listed below in scrambled order are 11 income statement categories. Use the numerals 1 through 11 to indicate the order in which these categories should appear on a multiple-step income statement. ( ) Discontinued operations. ( ) Cost of goods sold. ( ) Other revenues and gains. ( ) Net income. ( ) Income taxes. ( ) Sales revenue. ( ) Gross profit on sales. ( ) Income from operations. ( ) Income from continuing...
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Shown below is an income statement prepared by a poorly trained bookkeeper. Assume an income tax rate of 30% on all items. Ignore EPS. ABC Company Income Statement December 31, 20x1 Sales Revenue $1,192,375 Investment Revenue 9,250 Cost of goods sold (340,375) Selling + Administrative (563,250) Interest expenses (13,000) Loss on Building (Fire Damage) (80,000) Loss on disposal of business segment (32,500) NI 120,750 Prepare the template for a single-step income statement in good form. Then answer...
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