Ch. 17 - Revenue Recognition (17.1 - 17.7)

In determining the transaction price, the company must consider. A) variable consideration, time value of money, non-cash consideration, and consideration payable. B) the time value of money, but not the non-cash consideration. C) non-cash consideration, but not consideration payable D) variable consideration, but not the time value of money.

A) variable consideration, time value of money, non-cash consideration, and consideration payable.

The seller of a good or service should recognize revenue, when A) it identifies the separate performance obligations in the contract B) it determines the transaction price C) each performance obligation is satisfied D) it identifies the contract with customers

C) each performance obligation is satisfied

The best measure of the fair value of a performance obligation is. A) residual value B) adjusted market assessment C) standalone selling price D) expected cost plus a margin

C) standalone selling price

An indication of the customer has taken control of the good or service is that A) the customer has no significant risks or rewards of ownership B) the selling company has physical possession of the asset C) the selling company has transferred legal title to the asset D) the selling company has no right to payment for the good or service

C) the selling company has transferred legal title to the asset

The standard, Revenue from Contracts with Customers, A) adopts criteria that de-emphasize the importance of contracts with customers B) adopts " earned and realized" criteria C) adopts a revenue-gain approach for revenue recognition D) adopts an asset-liability approach for revenue recognition

D) adopts an asset-liability approach for revenue recognition

A contract should be treated as having multiple performance obligations if A) the contract creates enforceable rights or obligations. B) each service provided in the contract is interrelated. C) each service provided in the contract is interdependent D) each performance obligation is not highly dependent on other promises in the contract.

D) each performance obligation is not highly dependent on other promises in the contract.

When goods are consigned the consignee A) makes a journal entry when the consigned merchandise is received B) records advertising paid for the consignment as an expense C) recognizes both commissioner revenue and sales revenue D) only recognizes revenue associated with commissions

D) only recognizes revenue associated with commissions

The first step of the revenue recognition process is to determine the transaction price. - True - False

False - The first step is to identify contracts.

The revenue recognition principle states that revenue is recognized when the performance obligation is satisfied - True - False

True

Assets or liabilities are not recognized until one or both of the parties to the contract, perform. - True - False

True