Chapter 3, Problem 3ISTQ

Before revenue can be recognized, the revenue recognition principle requires the _____. A. Product to be shipped  B. Cash to be transferred  C. Service to be booked  D. Performance obligation be fulfill

Revenue is recognized for accounting purposes when a performance obligation is satisfied. In some situations, revenue is recognized over time as the fair values of assets and liabilities change. In other situations, however, accountants have developed guidelines for recognizing revenue at the point of sale. Questions: 1. Explain and justify why revenue is often recognized at the time of sale. 2. Explain in what situations it would be appropriate to recognize revenue over time.

How does Dropbox apply GAAP to revenue recognition? Explain and give examples.

Which type of revenue activity is correctly matched with the revenue recognition method?

Which of the following is not included in the FASB's 5-step model for evaluating when a company should recognize revenue? Identify the contract with a customer. Identify the performance obligations in the contract. Determine the transaction price. Recognize revenue when cash payment is received.

If the initial fee is collectible over an extended period and there is a significant uncertainty of its collection in full, the fee is  A. deferred of recognition as revenue B. recognized as revenue when collected C. not recognized as revenue at all. D. recognized as revenue in full

Understand the fundamental concepts related to revenue recognition and measurement.

under the cost recovery method of revenue recognition, a. Income is recognized immediately b. Income is recognized when the cash received from the sale of the product is greater than the cost of the product c. Income is recognized on a proportionate basis as cash is received on the sale of the product d. None of the above

Which is not a scenario wherein revenue is recognized over time? a. The customer simultaneously receives and consumes the benefits by the entity’s performance b. The entity’s performance creates or enhances an asset that will be transferred to the customer at a future date c. The entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date d. All of the above are scenarios wherein revenue is recognized over time e. None of the above