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.
A. Payment terms may not include a variable component
Above condition is not necessary as a part of revenue recognition as per ASC 606
Which of the following is not a necessary condition for a firm to account for a...
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 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!
Which of the following is least likely to be a reason why a long-term construction contract would qualify for revenue recognition over time? Multiple Choice The customer controls the asset as it is created. The seller is creating an asset that has no alternative use to the seller, and the seller has the legal right to receive payment for progress to date. The seller is constructing an addition to property that is owned by the customer. The customer consumes the...
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Part I: Background Kitchen Aid (KA) manufactures cordless mixers for use in the kitchens of consumers. KA sells to retailers, who sell the mixers to the ultimate consumer. One of KA’s retail customers is Jones Kitchenware (JK). On January 1, KA sells to and receives payment from JK for 100 cordless mixers with a one-year warranty for $50 each. The mixers are delivered by KA to JK upon receipt of payment and the warranty is initiated at that time. This...
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Please help me, Mesmerizing Marketers (MM) is a marketing company that offers a variety of marketing offerings to its customers. Specifically: MM a $1M, build $500K, build a$250K. amounts MM to the are not is, independently other a customer purchases all aforementioned items together, the total cost is $1.5M. Payment terms are 50 percent consideration due at contract signing, with the remaining 50 percent due over the rest of the development period (25 percent at mid-point, the app is downloaded...
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Case 2 PeeDee Marketers (PM) is a marketing company that offers a variety of offerings to its customers. Specifically: PM will create a TV commercial for $2M, build an app for $1M, and build a Facebook page for $500K. These amounts represent PM’s charges for these items when PM sells them separately to customers. The TV commercial, the app, and the Facebook page are not interrelated; that is, each functions independently of the other offerings. If a customer purchases all...
Case 2 PeeDee Marketers (PM) is a marketing company that offers a variety of offerings to its customers. Specifically: PM will create a TV commercial for $2M, build an app for $1M, and build a Facebook page for $500K. These amounts represent PM’s charges for these items when PM sells them separately to customers. The TV commercial, the app, and the Facebook page are not interrelated; that is, each functions independently of the other offerings. If a customer purchases all...