Which of the following is false? A. A liability is created when cash is received prior to delivery of the goods or services. 20. B. Revenue is recognized at the time of delivery of the goods or services if cash is received. C. Revenue is not recognized at the time of delivery of goods and services if cash is received after delivery of the goods and services. D. Collecting cash after delivery of a good or service does not create revenue on the income statement at the date of collection.

Which of the following is false? A. A liability is created when cash is received prior to delivery of the goods or services. 20. B. Revenue is recognized at the time of delivery of the goods or services if cash is received. C. Revenue is not recognized at the time of delivery of goods and services if cash is received after delivery of the goods and services. D. Collecting cash after delivery of a good or service does not create revenue on the income statement at the date of collection.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: This revenue recognition method applies when the customer wants to make payments in portions and the…

A: Revenue recognition states that the revenue has to be recognized when it is earned or realized or…

Q: 7. Which of the following statements regarding the gross and net methods for trade accounts payable…

A: The business organization offers goods to its customers by purchasing it's from suppliers Goods…

Q: Which of the following accounts is an example of a contra-asset? A) Cost of Goods Sold B)Sales…

A: CONTRA ASSETS contra asset account is a type of asset account where the account balance may…

Q: The direct write-off method records bad debt expense when an account is determined to be…

A: Answer is true

Q: Cougar Company credited cash for a prepayment. They did this because: a. Cash payment (or an…

A: A prepaid expense seems to be a sort of asset on the balance sheet that emerges from a company…

Q: Using the allowance method, is Bad Debt Expense recognized in the period in which ( a ) sales…

A: Using the allowance method, Bad Debt Expense is recognized in the period in which sales related to…

Q: The return of the defective merchandise from a sale of merchandise on account decreases the amount…

A: Sales Return: Sales return refers to the return of defective, damaged inventories or merchandise by…

Q: EITHER TRUE OR FALSE. Describe why the assertion is incorrect if it is in fact incorrect. 1. Cash…

A: Cash refers to the amount of monetary value that is available in physical form in the hand of an…

Q: Under ASC Topic 606 for revenue recognition, which of the following factors is not an indicator of…

A: Its Very Important to determine the Principal and agent as recording of revenue by both Principal…

Q: opic - Violation of Recognition, errors and intentional misstatements Question: Please explain and…

A: A "true and fair" financial statement refers to the presentation of financial information that is…

Q: statements is true? A.Deductions are not allowed unless there is a specific law authorizing the…

Q: The accounts related to the revenue cycle include all of the following except: A.…

A: Revenue cycle generally consist of 1.order received from the customer 2. process customer order…

Q: GAAP does not allow cash basis accounting to be used in external financial reports. True or…

A: GAAP gives the accounting rules and standards that are used to prepare the financial reports of an…

Q: For sellers of goods, the revenue recognition principle generally requires that revenues be recorded…

A: The objective of the question is to understand when the revenue recognition principle allows sellers…

Q: The revenue recognition principle a. states that revenue is not recorded until the cash is received…

A: Cash basis of accounting states that revenues are recorded in books of account when cash is received…

Q: What would signify the net amount that a business foresees to receive when the allowance method of…

A: Allowance method indicates the computation of estimated bad debts which the company expected to…

Q: The revenue account is not affected when a credit sale is made. A. True B. False

A: Credit Sale: It implies to the sale of products and services to the customer and the customer does…

Question

Which of the following is false?
A. A liability is created when cash is received prior to delivery of the goods or services.
20.
B. Revenue is recognized at the time of delivery of the goods or services if cash is
received.
C. Revenue is not recognized at the time of delivery of goods and services if cash is
received after delivery of the goods and services.
D. Collecting cash after delivery of a good or service does not create revenue on the
income statement at the date of collection.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Revenue Recognition

VIEW

Step 2: Explanation of answers and wrong choices

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

If a fictitious sale has been recorded, this affects the a) existence of sales. b) valuation of accounts receivable. c) occurrence of sales and existence of accounts receivable. d) occurrence of accounts receivable.
explain your answer and do not plagraized form anywhere
Which of the following is not a criterion that must be met for an item to be classified as a liability? A certain cash payment will occur in the future. A sacrifice will require the entity’s assets or services. There is a probable future sacrifice. There is a present obligation that results from a past transaction.
Which of the following is a limitation of the direct write-off method of accounting for uncollectible? The direct write-off method overstates assets on the balance sheet. The direct write-off method does not match expenses against revenue very well. The direct write-off method does not set up an allowance for uncollectible. All of the above
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
A serious exposure for an organization that is connnected with the revenue cycle is the loss of assets. What is the related threat and applicable contrtol procudure associated with this exposure? A. receiving unordered goods; compare to valid order B. billing errors; reconciliation of shipping documents to sales order C. shipping errors, data entry controls D. theft of inventory; documentation of all internal transfers of inventory