Question 1

When may companies use the completed-contract method?

Accepted Answer

Companies are restricted and may only us

Question 2

Penn sells cameras.On August 1,a customer purchases a camera for $5,700 cash.The parts cost Penn $2,500.Penn uses the perpetual inventory method.
Required: Prepare the necessary entries to record the sale.

Accepted Answer

The answer of Penn sells cameras.On August 1,a customer purchases...

Question 3

Companies may use the completed-contract method only if the contract ________.

Accepted Answer

A) is for less than two years 
B) exceeds five years 
C) does not meet criteria for percentage of completion method 
D) does not meet criteria for installment sales method 
A) is for less than two years 
B) exceeds five years 
C) does not meet criteria for percentage of completion method 
D) does not meet criteria for installment sales method

Question 4

What are the required disclosures for revenue contracts with customers?

Accepted Answer

The required disclosures for revenue con

Question 5

Fancy Gardens sells an annual magazine subscriptions for $50.On January 1,2017,Fancy Gardens sells 2,000 annual subscriptions to its magazine.The magazine is issued monthly.
Required: Prepare the journal entry to record the initial sale of the subscriptions and the adjusting entry at January 31.

Accepted Answer

The answer of Fancy Gardens sells an annual magazine subscriptions...

Question 6

The timing of revenue recognition is dependent upon the control of the good being in the hands of the ________.

Accepted Answer

A) buyer 
B) seller 
C) management 
D) any third party 
A) buyer 
B) seller 
C) management 
D) any third party

Question 7

Under the completed-contract method,revenues are only reported in the last year.

Accepted Answer

A) True 
 B)False

Question 8

Explain the similarities and differences between the two methods of accounting for long-term contracts.

Accepted Answer

The two methods for accounting for long-

Question 9

The general rule is that the transaction price should be allocated on the relative standalone selling prices prices unless a discount is ________.

Accepted Answer

A) not related to all of the contracts performance obligations 
B) related to all of the contracts performance obligations 
C) part of the variable consideration 
D) not part of the variable consideration 
A) not related to all of the contracts performance obligations 
B) related to all of the contracts performance obligations 
C) part of the variable consideration 
D) not part of the variable consideration

Question 10

Gray Uniforms is a wholesaler who sells school uniforms to retailers.On August 1,Gray contracts with Excel School Uniforms to sell 3,000 uniforms o Excel to be delivered September 1.The contract price is set at $200 each,The contract provides for a 10% volume discount if sales exceed 2,000 uniforms.The probability of sales of 2,000 uniforms is expected to be 60%.Using the most-likely-amount approach,the consideration is estimated to be ________.

Accepted Answer

A) $250,000 
B) $360,000 
C) $400,000 
D) $500,000 
A) $250,000 
B) $360,000 
C) $400,000 
D) $500,000

Question 11

What are the required disclosures concerning significant judgments?

Accepted Answer

With respect to judgments in revenue rec

Question 12

Motorcycle Madness sells an annual membership to its club for $300.On July 1,2017 Motorcycle Madness sells 1,000 of these.The club prepares financial statements annually.
Required: Prepare the journal entries that Motorcycle Madness would record on July 1,2017,December 31,2017,and on June 30,2018.

Accepted Answer

The answer of Motorcycle Madness sells an annual membership to...

Question 13

Refer to Tullis Construction.How much gross profit should Tullis recognize in Year 1 assuming the use of the percentage-of-completion method?

Accepted Answer

A) $0 
B) $750,000 
C) $2,000,000 
D) $2,500,000 
A) $0 
B) $750,000 
C) $2,000,000 
D) $2,500,000

Question 14

Companies provide information about performance obligations in contracts with customers,including information about ________.

Accepted Answer

A) types of warranties but not obligations 
B) types of warranties and obligations 
C) return obligations but not refund obligations 
D) liabilities exchanged 
A) types of warranties but not obligations 
B) types of warranties and obligations 
C) return obligations but not refund obligations 
D) liabilities exchanged

Question 15

Gleason Construction enters into a long-term fixed price contract to build an office building for $20,000,000.In the first year of the contract Camey incurs $6,000,000 of cost and the engineers determined that the remaining costs to complete are $10,000,000.How much gross profit or loss should Gleason recognize in Year 1 assuming the use of the completed-contract method?

Accepted Answer

A) $-0- 
B) $$4,000,000 profit 
C) $4,000,000 loss 
D) $375,000 profit 
A) $-0- 
B) $$4,000,000 profit 
C) $4,000,000 loss 
D) $375,000 profit

Question 16

Refer to Camey Corporation.How much should Camey recognize as Accounts Receivable at the end of Year 1 assuming the use of the completed-contract method?

Accepted Answer

A) $500,000 
B) $1,000,000 
C) $1,500,000 
D) $2,000,000 
A) $500,000 
B) $1,000,000 
C) $1,500,000 
D) $2,000,000

Question 17

Refer to Novella Company.How much revenue should Novella record on January 1?

Accepted Answer

A) $-0- 
B) $300 
C) $36,000 
D) $3,600,000 
A) $-0- 
B) $300 
C) $36,000 
D) $3,600,000

Question 18

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

Accepted Answer

A) $200,000 
B) $250,000 
C) $310,000 
D) $350,000 
A) $200,000 
B) $250,000 
C) $310,000 
D) $350,000

Question 19

Which one of the following is not an indicator of the transfer of control to the buyer?

Accepted Answer

A) Seller has present right to payment for the asset. 
B) Seller has legal title to the asset. 
C) Seller has transferred physical possession of property. 
D) Customer has accepted the asset. 
A) Seller has present right to payment for the asset. 
B) Seller has legal title to the asset. 
C) Seller has transferred physical possession of property. 
D) Customer has accepted the asset.

When may companies use the completed-contract method?

Penn sells cameras.On August 1,a customer purchases a camera for $5,700 cash.The parts cost Penn $2,500.Penn uses the perpetual inventory method. Required: Prepare the necessary entries to record the sale.

Companies may use the completed-contract method only if the contract ________.

What are the required disclosures for revenue contracts with customers?

Fancy Gardens sells an annual magazine subscriptions for $50.On January 1,2017,Fancy Gardens sells 2,000 annual subscriptions to its magazine.The magazine is issued monthly. Required: Prepare the journal entry to record the initial sale of the subscriptions and the adjusting entry at January 31.

The timing of revenue recognition is dependent upon the control of the good being in the hands of the ________.

Under the completed-contract method,revenues are only reported in the last year.

Explain the similarities and differences between the two methods of accounting for long-term contracts.

The general rule is that the transaction price should be allocated on the relative standalone selling prices prices unless a discount is ________.

What are the required disclosures concerning significant judgments?

Motorcycle Madness sells an annual membership to its club for $300.On July 1,2017 Motorcycle Madness sells 1,000 of these.The club prepares financial statements annually. Required: Prepare the journal entries that Motorcycle Madness would record on July 1,2017,December 31,2017,and on June 30,2018.

Refer to Tullis Construction.How much gross profit should Tullis recognize in Year 1 assuming the use of the percentage-of-completion method?

Companies provide information about performance obligations in contracts with customers,including information about ________.

Refer to Camey Corporation.How much should Camey recognize as Accounts Receivable at the end of Year 1 assuming the use of the completed-contract method?

Refer to Novella Company.How much revenue should Novella record on January 1?

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

Which one of the following is not an indicator of the transfer of control to the buyer?

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

Filters

Exam 8: Revenue Recognition

When may companies use the completed-contract method?

Penn sells cameras.On August 1,a customer purchases a camera for $5,700 cash.The parts cost Penn $2,500.Penn uses the perpetual inventory method. Required: Prepare the necessary entries to record the sale.

Companies may use the completed-contract method only if the contract ________.

What are the required disclosures for revenue contracts with customers?

Fancy Gardens sells an annual magazine subscriptions for $50.On January 1,2017,Fancy Gardens sells 2,000 annual subscriptions to its magazine.The magazine is issued monthly. Required: Prepare the journal entry to record the initial sale of the subscriptions and the adjusting entry at January 31.

The timing of revenue recognition is dependent upon the control of the good being in the hands of the ________.

Under the completed-contract method,revenues are only reported in the last year.

Explain the similarities and differences between the two methods of accounting for long-term contracts.

The general rule is that the transaction price should be allocated on the relative standalone selling prices prices unless a discount is ________.

What are the required disclosures concerning significant judgments?

Motorcycle Madness sells an annual membership to its club for $300.On July 1,2017 Motorcycle Madness sells 1,000 of these.The club prepares financial statements annually. Required: Prepare the journal entries that Motorcycle Madness would record on July 1,2017,December 31,2017,and on June 30,2018.

Refer to Tullis Construction.How much gross profit should Tullis recognize in Year 1 assuming the use of the percentage-of-completion method?

Companies provide information about performance obligations in contracts with customers,including information about ________.

Refer to Camey Corporation.How much should Camey recognize as Accounts Receivable at the end of Year 1 assuming the use of the completed-contract method?

Refer to Novella Company.How much revenue should Novella record on January 1?

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

Which one of the following is not an indicator of the transfer of control to the buyer?

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

Filters