Disregarding the special circumstances when bases other than the point of sale are used, discuss the advantages of each of the following objections to the point-of-sale basis of revenue recognition: (i) It is too conservative because revenue is earned throughout the entire process of production. (ii) It is not conservative enough because accounts receivable do not represent disposable funds, sales returns and allowances may be made, and collection and bad debt expenses may be incurred in a later period

Q: O In the case of flat-rate write-offs on receivables, the sales tax must also be corrected. O All…

A: Production cost refers to the expenses involved while producing a certain product.

Q: Expense Recognition Question: Why is that sometimes there is no direct relationship between…

A: Accounting is based on a set of principles and rules and the expense recognition principle is one of…

Q: Farhgate Inc. should recognize revenue when the performance obligation has been satisfied and when…

A: Farhgate Inc. should recognize revenue when the performance obligation has been satisfied and when…

Q: Why is the Modified Accelerated Cost Recovery System not generally accepted for financial accounting…

A:

Q: Which of the following may motivate managers to decrease the size of the allowance for doubtf Place…

A: Allowance for Bad debt is provision made for estimated uncollectible debt in the books of accounts.…

Q: Borrowing costs a. None of these answers are correct. b. must only be included in inventory cost if…

A: Borrowing costs refer to the interest and other costs incurred by a company when it borrows funds to…

Q: f accepting a special order is an example of avoidable costs. True False

A: Avoidable cost are cost that can be avoided if a activity is not undertaken, resulting in cost…

Q: When do companies break apart a sale and treat its parts differently for purposes of recognizing…

A: Earlier, the concept of revenue recognition was not properly framed and it created problems on the…

Q: True or False Question: Costs such as administrative salary expense and interest expense are more…

A: The cost of a product refers to the total amount of expenses incurred to produce or acquire a…

Q: Which of the following is not a disadvantage of using the FIFO cost flow assumption? includes all…

A: Lets understand the basics.There are various methods follow to calculate inventory balance. It…

Q: Penultimate Company uses a perpetual inventory system and has a December 31 year-end. Its records…

A: "Since you have asked multiple questions, the first question was answered for you. If you want the…

Q: The revenue recognition principle requires retailers to recognise sales revenue when it is earned…

A: The accrual basis accounting system is considered a feature of the accrual base accounting system…

Q: under the cost recovery method of revenue recognition, a. Income is recognized immediately b. Income…

A: Cost recovery method of recognition of revenue is used when there exists substantial doubt regarding…

Q: Which one of the following is not a disadvantage of the specific identification method of inventory…

A: Under specific identification methods of inventory, specific inventory movement is measured. So it…

Q: physical flow of inventory

A: Inventory valuation is essential for any business to figure out the correct net income and balance…

Q: If cash is received from a customer in the current period, but the related performance obligation is…

A: Accounting principles are general guidelines that are used by the accountant in preparing the…

Q: The largest item of the Deferred Tax Liability for most companies is caused by?

A: Deferred tax liabilityA deferred tax liability is an amount of money that a company expects to pay…

Q: The incomplete income statement of Bramble Corp. follows. Sales revenue Cost of goods sold Gross…

A: Income Statement:Which is a part of financial statement shows the income and expenses for the…

Q: What is the effect of bad debts on revenue recognition? a. Bad debts must be of a remote likelihood…

A: As per IAS/IFRS 15 Revenue From contract with customers, A Bad debt is an uncollectible accounts…

Q: Deferred Revenue True or false: A reduction of the deferred revenue account can be interpreted as a…

A: Introduction:- Deferred revenue also known as Unearned Revenue. which means advance payments…

Q: Which of the following is an example of a conservative accounting practice? a. Estimate the…

A: Introduction:   Conservative accounting practices refers to the accounting practices which tend to…

Q: Indicate whether each of the following statements is true or false. Delayed recognition of revenue…

A: 1) As per Revenue recognition principle, Delayed recognition of revenue is appropriate if the degree…

Q: The major criticism of the lower of cost or market rule for valuation of inventory is that

A:

Q: Which one among the following conditions is NOT a condition of Murabaha:   - Payment may be made…

A: Murabaha, also known as cost-plus finance, is an Islamic financing system in which the buyer and…

Q: Payments to a customer for slotting fees: a. can never be recognized. b. must be expensed…

A: Slotting Fees: it is the fees paid by the manufacturer to Retailer for putting their product on the…

Q: Revenue can be recognized when all of the following criterias are met EXCEPT     There is credible…

A: BEFOR REVENUE IS RECOGNIZED FOLLOWING CRITERIA'S MUST ME MET : 1. PERSUASIVE EVIDENCE OF AN…

Q: If the amount of bad debts is significant, use of the direct write-off method increases the…

A: Bad-Debt: It implies to that portion of accounts receivable which is not expected to be collected…

Q: ts) An auditor recently asked an accounting manager to perform a LCM test on a batch of inventory.…

A: Valuation of Inventory: The lower of cost or market (LCM) approach stipulates that when valuing a…

Q: Analysts must recognize that the use of the specific identification method to value inventory has a…

A: The amount, by which the Inventory Level exceeds the Closing Inventory level is referred to as the…

Q: Historical cost accounting remains in use because of its practical advantages. Which of the…

A: Cost Accounting -Managerial accounting includes cost accounting, which gathers and examines…

Q: According to PAS 18 Revenue, which of the following is not a criterion to be satisfied before…

A: As Per PAS 18, Criteria of Revenue recognition is as follows: The outcome of the transaction is…

Q: Which of the following factors could contribute to mistreatments in the revenue cycle? (select all…

A: Revenue Cycle: The revenue cycle is a method for defining and maintaining the processes used for the…

Q: Discuss the merits of the following objections to the sales basis of revenue recognition; 1.It is…

A: Sales basis of revenue recognition: It's means that revenue will be recognised when the title of…

Q: Which of the following statements about accounting income and economic income is (are) correct? I.…

A: Accounting profits includes explicit costs only, whereas economic profits includes both explicit and…

Q: Which of the following is most likely to indicate the existence of related parties? a. Elimination…

A: Related party may be defined as the person or entity which is related to the reporting entity if…

Q: Using the contract-based approach, revenue is recognized for the sale of goods when the following…

A: According to the IFRS criteria, for revenue to be recognized, the following conditions must be…

Q: If CBA Failed to meet earning expectations because Loan Impairment expense was Higher than expected,…

A: The question is asking about the likely Earnings Response Coefficient (ERC) if Commonwealth Bank of…