When the franchisor supplies equipments and inventories without a reasonable profit, part of the initial franchise fee, sufficient to cover the estimated costs in excess of that price is * A.not recognized. B.deferred and recognized over the period the goods are likely to be sold to the franchisee C.deferred and recognized when finally sold to the franchisee D. recognized immediately

When the franchisor supplies equipments and inventories without a reasonable profit, part of the initial franchise fee, sufficient to cover the estimated costs in excess of that price is * A.not recognized. B.deferred and recognized over the period the goods are likely to be sold to the franchisee C.deferred and recognized when finally sold to the franchisee D. recognized immediately

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 19E

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A company should immediately recognize: A) any gain when it constructs a piece of equipment at a cost savings. B) any gain when it makes a bargain purchase. C) any gain when a company receives no cash for an asset received in an exchange. D) any loss when it ignorantly pays too much for an asset originally.
If a company sells a product, and gives the buyer the right to return the product within a specified period, revenue from the sales transaction should be recognized at the time of sale if: Question 21 options: there is a transfer of the risks and rewards of ownership. the market for returnable goods is unknown. the amount of future returns can be reasonably estimated. the amount of goods returned is likely to be high. At the time of a contract signing, Question 16 options: no journal entry is recorded. cash is recorded. a contract liability is recorded. a contract asset is recorded.
If the value implied by the purchase price of an acquired company exceeds the fair values of identifiable net assets, the excess should be a. Allocated goodwill b. Allocated to reduce long-lived assets c. Allocated to reduce any previously recorded goodwill and classify any remainder as an ordinary gain. d. Allocated to reduce current and long-lived assets A branch office allowed to make sales, carry inventory for resale to customers, and incur normal operating expenses. The home office ships merchandise to the branch office at cost plus a 20% markup. The home office account is used in its customary fashion, it will track: a. Unrealized inventory profits and overall branch profits losses b. Overall branch profits and losses but not unrealized inventory profits c. Unrealized inventory profits only d. Unrealized inventory profits and overall branch profits but not branch losses
1. A company is deciding whether to exchange an old asset for a new asset. Within the context of the exchange decision, and ignoring income tax considerations, the undepreciated book value of the old asset would be considered a(an) Sunk cost Irelevant cost No No Yes No No Yes d. Yes Yes 2. Expected future costs that will differ among alternatives a. Opportunity cost. b. Relevant costs. c. Sunk cost. d. Out-of-pocket costs.
4. Under PFRS 15, when shall a franchisor recognize revenue from contingent franchise fee or revenue for a sales-based royalty? a. When the sales of the franchisee occurs. b. When the performance obligation to which some or all of the contingent franchise fees or sales- based royalty has been satisfied or partially satisfied. c. When both A and B events occur. d. When either A or B event occurs.
Purchase commitmentsA. Are obligations of the company to acquire certain goods at a fixed price and fixed quantity sometime in the futureB. require disclosures when considered common and significantC. Giving rise to a purchase price falling below the agreed price is accounted for as debit to loss on purchase commitments and credited to an estimated liabilityD. All of the aboveE. None of the aboveOwnership of inventories is normally transferred to the buyerA. when legal title to inventories is transferredB. when the purchase price if fully paidC. upon shipment of the goodsD. upon filling up the sales orderWhen accounting for inventoriesA. the form of sales contract is more important than its substanceB. the agreement between seller and buyer shall be considered in determining the timing of transfer of ownership over the goodsC. sales contract is ignored since ownership over inventories are transferred only upon receipt of delivery by the buyerD. a journal entry is made only upon receipt…
When a component of a company's operations is classified as held for sale at the end of an accounting period, The component may not be reported as a discontinued operation until sold. The component will be reported on the balance sheet at the higher of its (1) fair value net of any costs to sell or (2) book value. The company may report the difference between the component's (1) fair value net of any costs to sell and (2) book value as a loss from discontinued operations on the income statement. None of these choices apply.
5. Which of the following is an element of cost? a. Cost of employee benefits not directly associated with the acquisition of PPE b. Initial estimate of the cost of dismantling and removing the item and restoring the site on which it is located, the obligation of which an entity incurs. c. Advertising and promotion d. initial operating losses e. Refundable purchase taxes
Camel Company sells a segment of its operations at a loss. Camel has not previously experienced such an event and does not expect to again.The loss from the disposal of the segment should be reported in the income statement as: Question 16 options: A) A separate amount in comprehensive income B) A separate amount in net income from continuing operations C) A separate amount in a discontinued operations section D) As part of cost of goods sold
Which cost incurred on equipment does not belong to the group? Freight on acquisition of equipment Non refundable tax paid on equipment upon purchase Testing and installation costs of equipment Training of personnel who will operate the equipment
The cost-plus approach: a. refers to contracts that are modified from their original terms during the course of the contract. b. refers to contracts where the contractor is not expected to recover all costs incurred in completing the project. c. is not allowed under ASC Topic 606 guidance for revenue recognition. d. uses an assumed reasonable profit margin to determine the stand-alone price.
Which one among the following conditions is NOT a condition of Murabaha: - Payment may be made by buyer during construction in installments. lump sum at delivery. or deferred either with a lump sum payment or in installments - The mark-up or profit will be stated and agreed by buyer and cannot be changed later - All the conditions are conditions of Murabaha. - Cost of goods or services including any direct or indirect costs (packaging. transportation. delivery. installation, are revealed to buyer