Which of the following is not true when a company allocates a transaction price to separate performance obligations in Step 4 of the revenue recognition process? O The allocation should be based on the dollar allocations specified in the contract. O Companies should use an adjusted market assessment approach, if possible. O Companies can use different methods to allocate the transaction price, depending on the circumstances. O The allocation should be based on the relative fair values of the performance obligations.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Which of the following is not true when a company allocates a
transaction price to separate performance obligations in Step 4 of
the revenue recognition process?
O The allocation should be based on the dollar allocations specified in the
contract.
O Companies should use an adjusted market assessment approach, if
possible.
O Companies can use different methods to allocate the transaction price,
depending on the circumstances.
O The allocation should be based on the relative fair values of the
performance obligations.
Transcribed Image Text:Which of the following is not true when a company allocates a transaction price to separate performance obligations in Step 4 of the revenue recognition process? O The allocation should be based on the dollar allocations specified in the contract. O Companies should use an adjusted market assessment approach, if possible. O Companies can use different methods to allocate the transaction price, depending on the circumstances. O The allocation should be based on the relative fair values of the performance obligations.
At the date of declaration, all are true about a property dividend
except:
O A property dividend results in a reduction to Additional Paid-In Capital.
O A property dividend results in a reduction to Retained Earnings
O A property dividend results in a reduction of Total Stockholders' Equity
O A property dividend can generate a gain or loss based on the property's
relative fair value and book value.
Which of the following is true about direct costs companies incur to
sell stock?
O All of these answers are correct.
O These costs include underwriting costs.
O They are accounted for as a reduction to additional paid-in capital.
O They do not meet the definition of an expense.
Transcribed Image Text:At the date of declaration, all are true about a property dividend except: O A property dividend results in a reduction to Additional Paid-In Capital. O A property dividend results in a reduction to Retained Earnings O A property dividend results in a reduction of Total Stockholders' Equity O A property dividend can generate a gain or loss based on the property's relative fair value and book value. Which of the following is true about direct costs companies incur to sell stock? O All of these answers are correct. O These costs include underwriting costs. O They are accounted for as a reduction to additional paid-in capital. O They do not meet the definition of an expense.
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