1 the core principle of revenue recognition is that a company should recognize reven 4313631

1 the core principle of revenue recognition is that a company should recognize reven 4313631

1.The core principle of revenue recognition is that a company should recognize revenue when it has been earned.

a.True

b.False

2.One type of revenue is the settlement of a liability that occurs as a result of a company’s primary operating activities.

a.True

b.False

3.The FASB provides a 4-step model for evaluating when a company should recognize revenue.

a.True

b.False

4.The first step of the revenue recognition model is to identify the contract with the customer.

a.True

b.False

5.A contract may be written, oral, or implied by customary business practices.

a.True

b.False

6.Revenue is recognized when a contract is enacted.

a.True

b.False

7.A contract modification always results in a new contract if the modification adds distinct goods or services at a price that reflects their stand-alone selling price.

a.True

b.False

8.A constructive obligation is a promise in a contract with a customer to transfer goods or services.

a.True

b.False

9.A good is considered distinct if it is a separately identifiable good from which a customer is able to receive benefits either separate from or together with other resources.

a.True

b.False

10.Nonrefundable fees from customers are recognized as revenue when received.

a.True

b.False

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