Question 1

Refer to Gordo Yachts.Prepare all necessary entries for 2017 assuming the use of the percentage-of-completion method.

Accepted Answer

The answer of Refer to Gordo Yachts.Prepare all necessary entries...

Question 2

Disclosures required for revenue include all of the following except ________.

Accepted Answer

A) disaggregation of revenue 
B) performance obligations 
C) assessing constraints on variable consideration 
D) allocating assets 
A) disaggregation of revenue 
B) performance obligations 
C) assessing constraints on variable consideration 
D) allocating assets

Question 3

Refer to Agee Corporation.Using the most-likely-amount approach,the transaction price would be

Accepted Answer

$250,000 +

Question 4

Refer to Kramer Iron Works.Allocate the transaction price using the adjusted market assessment approach.

Accepted Answer

The answer of Refer to Kramer Iron Works.Allocate the transaction...

Question 5

Refer to Derby Company.The amount of revenue to be recognized on January 1 is ________.

Accepted Answer

A) $0 
B) $18,750 
C) $225,000 
D) $300,000 
A) $0 
B) $18,750 
C) $225,000 
D) $300,000

Question 6

What is a consignment sale?

Accepted Answer

A consignment sale is an arrangement whe

Question 7

Goods and services are transferred over time if the customer controls the asset as the seller creates it or enhances it over time.

Accepted Answer

A) True 
 B)False

Question 8

Refer to Tullis Corporation.How much should Tullis report as Accounts Receivable at the end of year 1 on the balance sheet assuming the use of the completed-contract method?

Accepted Answer

A) $0 
B) $500,000 
C) $4,000,000 
D) $5,000,000 
A) $0 
B) $500,000 
C) $4,000,000 
D) $5,000,000

Question 9

Refer to Craft Construction.Assume Craft uses the percentage-of-completion method for revenue recognition.Compute the amount of gross profit for 2016 and 2017.

Accepted Answer

The answer of Refer to Craft Construction.Assume Craft uses the...

Question 10

What happens to the Construction in Progress account and the Billings on Construction in Progress accounts upon completion of a long-term contract?

Accepted Answer

At the end of the contract these two acc

Question 11

Refer to Kramer Iron Works.Allocate the transaction price using expected-cost-plus-a-margin approach.

Accepted Answer

The answer of Refer to Kramer Iron Works.Allocate the transaction...

Question 12

ABC provides a product and installation to be used in conjunction with the buyer's production system.The buyer's system is unusable without ABC's product.The product and the installation are an example of ________.

Accepted Answer

A) three performance obligations 
B) no performance obligations 
C) a single performance obligation 
D) two performance obligations 
A) three performance obligations 
B) no performance obligations 
C) a single performance obligation 
D) two performance obligations

Question 13

An example of a good transferred over time is a ________.

Accepted Answer

A) refrigerator 
B) soft drink 
C) magazine subscription 
D) suit 
A) refrigerator 
B) soft drink 
C) magazine subscription 
D) suit

Question 14

Louise paints seascapes and landscapes.In 2017 she placed nine of her most prized paintings with the Wainwright Studio Gallery.The paintings each carried a price of $1,000,and Louise made a deal with the Gallery to pay them a 40% commission on all paintings sold.At the end of the year three paintings had been sold.How much revenue will Louise recognize on the consignment sales?

Accepted Answer

A) $3,000 
B) $1,800 
C) $1,200 
D) $-0- 
A) $3,000 
B) $1,800 
C) $1,200 
D) $-0-

Question 15

If a seller receives cash before the appropriate time to recognize revenue,it should treat the consideration as a liability.

Accepted Answer

A) True 
 B)False

Question 16

A seller recognizes the right to return sales as a/an ________.

Accepted Answer

A) liability 
B) asset 
C) revenue 
D) expense 
A) liability 
B) asset 
C) revenue 
D) expense

Question 17

How should Pemco record the receipt of cash on January 1?

Accepted Answer

A) liability of $480,000 
B) revenue of $240,000 
C) liability of $18,750 
D) revenue of $18,750 
A) liability of $480,000 
B) revenue of $240,000 
C) liability of $18,750 
D) revenue of $18,750

Question 18

Refer to Greenwell Farms.How much sales revenue will Greenwell report on January 1,2016?

Accepted Answer

A) $50,000 
B) $42,867 
C) $58,320 
D) $92,867 
A) $50,000 
B) $42,867 
C) $58,320 
D) $92,867

Question 19

The expected-value approach for revenue recognition is appropriate when variable consideration is included in the contract.

Accepted Answer

A) True 
 B)False

Question 20

Refer to Derby Company.The amount of revenue to be recognized each month is ________.

Accepted Answer

A) $0 
B) $18,750 
C) $22,500 
D) $25,000 
A) $0 
B) $18,750 
C) $22,500 
D) $25,000

Exam 8: Revenue Recognition

Refer to Gordo Yachts.Prepare all necessary entries for 2017 assuming the use of the percentage-of-completion method.

Disclosures required for revenue include all of the following except ________.

Refer to Agee Corporation.Using the most-likely-amount approach,the transaction price would be

Refer to Kramer Iron Works.Allocate the transaction price using the adjusted market assessment approach.

Refer to Derby Company.The amount of revenue to be recognized on January 1 is ________.

What is a consignment sale?

Goods and services are transferred over time if the customer controls the asset as the seller creates it or enhances it over time.

Refer to Tullis Corporation.How much should Tullis report as Accounts Receivable at the end of year 1 on the balance sheet assuming the use of the completed-contract method?

Refer to Craft Construction.Assume Craft uses the percentage-of-completion method for revenue recognition.Compute the amount of gross profit for 2016 and 2017.

What happens to the Construction in Progress account and the Billings on Construction in Progress accounts upon completion of a long-term contract?

Refer to Kramer Iron Works.Allocate the transaction price using expected-cost-plus-a-margin approach.

ABC provides a product and installation to be used in conjunction with the buyer's production system.The buyer's system is unusable without ABC's product.The product and the installation are an example of ________.

An example of a good transferred over time is a ________.

If a seller receives cash before the appropriate time to recognize revenue,it should treat the consideration as a liability.

A seller recognizes the right to return sales as a/an ________.

How should Pemco record the receipt of cash on January 1?

Refer to Greenwell Farms.How much sales revenue will Greenwell report on January 1,2016?

The expected-value approach for revenue recognition is appropriate when variable consideration is included in the contract.

Refer to Derby Company.The amount of revenue to be recognized each month is ________.

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

OL: Revenue Recognition

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Acquisition, cost Allocation, and Derecognition

Long-Term Operating Assets: Departures From Historical Cost

Operating Liabilities and Contingencies

OL: Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

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