Plz explain in detail 6. On an accrual basis under generally accepted accounting principles, revenue is recognizedusing the realization principle. Under this principle, revenues are usually recognizeda. when cash is received.b. when the earnings process is complete.c. at the time a customer is billed.d. at the time a valid contract exists between seller and buyer.

Accrual concept in accounting says that all revenues that are earned in a particular accounting…

Answered: 6. On an accrual basis under generally…

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter9: Auditing The Revenue Cycle.

Section: Chapter Questions

Problem 4CYBK

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When does a company record the transfer of accounts receivable as a sale? As a secured borrowing (a liability)?
At what point does revenue recognition occur? A. When the purchase order is received B. When the seller receives the money for the job C. When the seller has met performance D. When the purchaser makes payment
Which of the following is the principle that a company must recognize revenue in the period in which it is earned; it is not considered earned until a product or service has been provided? A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principle
A contract between one or more parties creates: a. the date that cash is paid by the customer b. enforceable rights and obligations for the parties c. revenue for recognition d. the fixed amount of payments for the good or service
Which of the following is not a criterion to recognize revenue under GAAP?A. The earnings process must be completed.B. A product or service must be provided.C. Cash must be collected.D. GAAP requires that the accrual basis accounting principle be used in the revenue recognition process
The practice of recording advance payments from customers as a liability is an example of applying the O Going concern assumption. O Monetary unit assumption. O Historical cost principle. Revenue recognition principle.
Under accrual-basis accounting,sales made on credit are usually reported as: A.liabilities B.revenue C.a contra account to sales revenue D.cash from operating activities
Revenue is generally recognised at the point of sale. Which principal is applied a. Consistency b. Matching c. Revenue recognition / Realisation d. Cost principle
Under the general rule of revenue recognition, revenue is recognized when Group of answer choices A.all related expenses have been incurred. B.a contractual agreement exists, and cash collection is assured. C.the earnings process is complete, and a valid promise of payment has been received. D.marketability and market price are assured.
Under the realization principle, revenue from sale of products is recognized a. At date of delivery to the customers C. When the customers are billed b. When the inventories are readied for shipment D. Upon receipt of cash payment
Use the list of concepts given to match the description of the concept to the concept.
Which of the following is not a criterion to recognize revenue under GAAP? GAAP requires that the accrual basis accounting principle be used in the revenue recognition process. The earnings process must be completed. A product or service must be provided. Cash must be collected O O O O

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