Give me answer PART A:accountingobligations?Which principle dictates thefor take-or-pay contract(1) Record liability at full contract amount(2) Recognize when minimum payment due(3) Treat as regular purchase commitment(4) Defer until product delivery

Explanation of Take-or-Pay Contracts:Take-or-pay contracts are agreements where the buyer commits to…

Answered: PART A: accounting obligations? Which…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter8: Revenue Recognition, Receivables, And Advances From Customers

Section: Chapter Questions

Problem 3Q

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Question 3 Which of the following is not an issue that must be considered in determining transaction price? Noncash consideration Consideration payable to the customer Any significant financing component in the contract All of the above are considered in determining the transaction price
Step 1 of the "five-step model" states that certain conditions must be satisfied before an entity can account for a contract with a customer. Which of the following is not one of these conditions? Oa The entity and the customer have approved the contract and are committed to perform their contractual obligations. O b. The payment terms can be identified. O citis certain that the entity will collect the consideration to which it is entitled. Od. Each party's rights about the goods or services concerned can be identified.
An encumbrance represents the estimated future liabilities for goods or services resulting from placing a purchase order or signing a contract. a. True b. False
33. Entity A enter into a long-term contract to provide service. The outcome of the transaction can be estimated reliably and the progress on the contract can be measured with sufficient reliability. According to PPSAS, how should entity A recognize revenue from the contract? On a straight-line basis over the contract term By reference to the stage of completion of the contract at the reporting date Full recognition of contract price upon completion of the contract Only to the extent of costs that are expected to be recovered.
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Multiple-Choice Question: 1. Using the contract-based approach, revenue is recognized for the sale of goods when the following conditions have been met: A. the seller no longer has control over the goods. B. all of these conditions are met. C. delivery of goods has occurred, consistent with terms of a real or implied contract, and any related performance obligation has been completed. D. the amount of revenue and costs can be reliably measured and it is probable the cash will be collected. Please explain for the answer, and why the rest is incorrect.
Question- The contact asset
_____ is a contract that involves compensation for specific potential future losses in exchange for periodic payments and that provides for the transfer of the risk of a loss, from one entity to another, in exchange for a premium. a.Spot contract b.Insurance c.Hedging d. Forward contract
Which of the following best describes the current revenue recognition principle? Recognize revenue in the accounting period when the performance obligation is satisfied. Recognize revenue in the accounting period when cash is received. Recognize revenue when it is earned. Identify separate performance obligations in the contract.
Partial satisfaction of a multiple performance obligation is reported on the balance sheet asa. contract liability.b. receivable.c. contract asset.d. unearned service revenue
Which answer is accurate?

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PART A: accounting obligations? Which principle dictates the for take-or-pay contract (1) Record liability at full contract amount (2) Recognize when minimum payment due (3) Treat as regular purchase commitment (4) Defer until product delivery