Choose the right Subject:Financial Accounting-Howdosatisfaction-guaranteed refund policies affectrevenue recognition? a) Defer all revenue untilright expires b) Recognize only non-refundableportion c) Estimate returns based on experienced) Wait for actual returns

Explanation of Satisfaction-Guaranteed Refund Policies: These are customer-friendly policies that…

Answered: Subject: Financial Accounting-How do…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 1MC: Which of the following is not a criterion to recognize revenue under GAAP? A. The earnings process...

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FINANCIAL/GENERAL ACCOUNTING
Which accounting principle requires that revenue be recognized when it is earned, regardless of when payment is received? A. Matching Principle B. Revenue Recognition Principle C. Historical Cost Principle D. Full Disclosure Principle
Which of the following statements is correct? Options: • The net income would still be the same regardless of accounting method that is used whether cash basis or accrual basis • Pre-collections initially recorded as income will overstate the profit at the end of the accounting period if no adjustment is done for unearned portion • Deferral is intended to recognize income earned but not yet received • Accrual of expenses will increase the expense element and will correspondingly decrease the liability
Question: Which accounting principle states that revenue should be recognized when it is earned and expenses when they are incurred? a. Matching principle b. Revenue recognition principle c. Conservatism principle d. Time period principle
Which of the following is an assumption made in the preparation of the financial statements? Select one: a. The current market value is assumed to be less relevant than the original cost paid. b. Financial statements are prepared for a specific entity that is distinct from the entity's owners. c. The preparation of financial statements for a specific time period assumes that the balance sheet covers a designated period of time. d. Financial statements are prepared assuming that inflation
Give an example and explanation for each of the following differences between when revenues are recognized and cash flows are received: recognition simultaneous with receipt; recognition prior to receipt; and recognition after receipt.
Expenses represent outflows of assets or increases in liabilities as a result of efforts to produce revenues.
How should correction of errors be reported in the financialstatements?
Listed below are several information characteristics and accounting principles and assumptions. Match the letter of each with the appropriate phrase that states its application. (Items a through k may be used more than once or not at all.) Economic entity assumption g. Matching principle Going concern assumption h. Full disclosure principle Monetary unit assumption i. Relevance characteristic Periodicity assumption j. Reliability characteristic Historical cost principle k. Consistency characteristic Revenue recognition principle ____ 1. Stable-dollar assumption (do not use historical cost principle). ____ 2. Earning process completed and realized or realizable. ____ 3. Presentation of error-free information with representational faithfulness. ____ 4. Yearly financial reports. ____ 5. Accruals and deferrals in the adjusting and closing process. (Do not use going concern.) ____ 6. Useful standard measuring unit for business…
May you please help me determine the effect on the accounting equation?
The accounting concept that supports reporting revenues in the period in which they are earned is called the: revenue recognition concept. B) accounting period concept. timing concept. D) adjusting concept.
Case Questions1. Consider the principles, assumptions, and constraints of Generally AcceptedAccounting Principles (GAAP). Define the revenue recognition principle andexplain why it is important to users of financial statements.2. Consider the Sithe Energies contract described in the case. Does the account-ing for this contract provide an example of how Enron violated the revenuerecognition principle? Why or why not? Please be specific.3. Consult Paragraphs .06–.07 of AU Section 319. Based on the case informa-tion, do you believe that Enron had established an effective system of inter-nal control over financial reporting related to the contract revenue recordedin its financial statements? Why or why not? 4. As an auditor, what type of evidence would you want to examine to deter-mine whether Enron was inappropriately recording revenue from the SitheEnergies contract?5. Consider the role of the Enron employee who was responsible for applyingMTM accounting rules to electric power…

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Subject: Financial Accounting-How do satisfaction-guaranteed refund policies affect revenue recognition? a) Defer all revenue until right expires b) Recognize only non-refundable portion c) Estimate returns based on experience d) Wait for actual returns