Financial Accounting Standards Board (FASB) FASB is an independent 7 member board of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP. The revenue recognition The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed. Principal Principal is the legal owner of goods or service which is transferred to the customer for legal consideration. Agent Agent is a facilitator for transferring goods and service from seller to buyers. Agent receives commission from principal for the service rendered. Performance obligation Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract. To indicate: The specific Codification citation that discusses the factors assessed by an entity to decide whether the nature of promise is to act as a principal or agent.

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Answer 1

Question

Chapter 6, Problem 6.12DMP

Requirement – 1

To determine

Financial Accounting Standards Board (FASB)

FASB is an independent 7 member board of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP.

The revenue recognition

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

Principal

Principal is the legal owner of goods or service which is transferred to the customer for legal consideration.

Agent

Agent is a facilitator for transferring goods and service from seller to buyers. Agent receives commission from principal for the service rendered.

Performance obligation

Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract.

To indicate: The specific Codification citation that discusses the factors assessed by an entity to decide whether the nature of promise is to act as a principal or agent.

Requirement – 2

To determine

To indicate: The specific codification citation which indicate that an entity is a principal, and mention the indicators.

Requirement – 3

To determine

To indicate: The location of note for G Incorporation’s revenue recognition policy.

Requirement – 4

To determine

To discuss: The G Incorporation’s reason for its revenue recognition choices, also explain whether G Incorporation’s reasoning is acceptable.

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Students have asked these similar questions

Lifeline, Inc., has sales of $601,000, costs of $257,000, depreciation expense of $63,000, interest expense of $30,000, and a tax rate of 35%. Required: What is the net income of this firm?

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Answer 2

Question

Chapter 6, Problem 6.12DMP

Requirement – 1

To determine

Financial Accounting Standards Board (FASB)

FASB is an independent 7 member board of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP.

The revenue recognition

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

Principal

Principal is the legal owner of goods or service which is transferred to the customer for legal consideration.

Agent

Agent is a facilitator for transferring goods and service from seller to buyers. Agent receives commission from principal for the service rendered.

Performance obligation

Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract.

To indicate: The specific Codification citation that discusses the factors assessed by an entity to decide whether the nature of promise is to act as a principal or agent.

Requirement – 2

To determine

To indicate: The specific codification citation which indicate that an entity is a principal, and mention the indicators.

Requirement – 3

To determine

To indicate: The location of note for G Incorporation’s revenue recognition policy.

Requirement – 4

To determine

To discuss: The G Incorporation’s reason for its revenue recognition choices, also explain whether G Incorporation’s reasoning is acceptable.

Expert Solution & Answer

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Answer 3

Question

Chapter 6, Problem 6.12DMP

Requirement – 1

To determine

Financial Accounting Standards Board (FASB)

FASB is an independent 7 member board of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP.

The revenue recognition

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

Principal

Principal is the legal owner of goods or service which is transferred to the customer for legal consideration.

Agent

Agent is a facilitator for transferring goods and service from seller to buyers. Agent receives commission from principal for the service rendered.

Performance obligation

Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract.

To indicate: The specific Codification citation that discusses the factors assessed by an entity to decide whether the nature of promise is to act as a principal or agent.

Requirement – 2

To determine

To indicate: The specific codification citation which indicate that an entity is a principal, and mention the indicators.

Requirement – 3

To determine

To indicate: The location of note for G Incorporation’s revenue recognition policy.

Requirement – 4

To determine

To discuss: The G Incorporation’s reason for its revenue recognition choices, also explain whether G Incorporation’s reasoning is acceptable.

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Answer 4

Question

Chapter 6, Problem 6.12DMP

Requirement – 1

To determine

Financial Accounting Standards Board (FASB)

FASB is an independent 7 member board of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP.

The revenue recognition

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

Principal

Principal is the legal owner of goods or service which is transferred to the customer for legal consideration.

Agent

Agent is a facilitator for transferring goods and service from seller to buyers. Agent receives commission from principal for the service rendered.

Performance obligation

Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract.

To indicate: The specific Codification citation that discusses the factors assessed by an entity to decide whether the nature of promise is to act as a principal or agent.

Requirement – 2

To determine

To indicate: The specific codification citation which indicate that an entity is a principal, and mention the indicators.

Requirement – 3

To determine

To indicate: The location of note for G Incorporation’s revenue recognition policy.

Requirement – 4

To determine

To discuss: The G Incorporation’s reason for its revenue recognition choices, also explain whether G Incorporation’s reasoning is acceptable.

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 6.12DMP

Requirement – 1

To determine

Financial Accounting Standards Board (FASB)

FASB is an independent 7 member board of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP.

The revenue recognition

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

Principal

Principal is the legal owner of goods or service which is transferred to the customer for legal consideration.

Agent

Agent is a facilitator for transferring goods and service from seller to buyers. Agent receives commission from principal for the service rendered.

Performance obligation

Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract.

To indicate: The specific Codification citation that discusses the factors assessed by an entity to decide whether the nature of promise is to act as a principal or agent.

Requirement – 2

To determine

To indicate: The specific codification citation which indicate that an entity is a principal, and mention the indicators.

Requirement – 3

To determine

To indicate: The location of note for G Incorporation’s revenue recognition policy.

Requirement – 4

To determine

To discuss: The G Incorporation’s reason for its revenue recognition choices, also explain whether G Incorporation’s reasoning is acceptable.

Answer 6

Chapter 6, Problem 6.12DMP

Requirement – 1

To determine

Financial Accounting Standards Board (FASB)

FASB is an independent 7 member board of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP.

The revenue recognition

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

Principal

Principal is the legal owner of goods or service which is transferred to the customer for legal consideration.

Agent

Agent is a facilitator for transferring goods and service from seller to buyers. Agent receives commission from principal for the service rendered.

Performance obligation

Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract.

To indicate: The specific Codification citation that discusses the factors assessed by an entity to decide whether the nature of promise is to act as a principal or agent.

Answer 7

Chapter 6, Problem 6.12DMP

Requirement – 1

To determine

Financial Accounting Standards Board (FASB)

FASB is an independent 7 member board of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP.

The revenue recognition

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

Principal

Principal is the legal owner of goods or service which is transferred to the customer for legal consideration.

Agent

Agent is a facilitator for transferring goods and service from seller to buyers. Agent receives commission from principal for the service rendered.

Performance obligation

Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract.

To indicate: The specific Codification citation that discusses the factors assessed by an entity to decide whether the nature of promise is to act as a principal or agent.

Answer 8

Requirement – 2

To determine

To indicate: The specific codification citation which indicate that an entity is a principal, and mention the indicators.

Answer 9

Requirement – 2

To determine

To indicate: The specific codification citation which indicate that an entity is a principal, and mention the indicators.

Answer 10

Requirement – 3

To determine

To indicate: The location of note for G Incorporation’s revenue recognition policy.

Answer 11

Requirement – 3

To determine

To indicate: The location of note for G Incorporation’s revenue recognition policy.

Answer 12

Requirement – 4

To determine

To discuss: The G Incorporation’s reason for its revenue recognition choices, also explain whether G Incorporation’s reasoning is acceptable.

Answer 13

Requirement – 4

To determine

To discuss: The G Incorporation’s reason for its revenue recognition choices, also explain whether G Incorporation’s reasoning is acceptable.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 6 - What are the five key steps a company follows to...Ch. 6 - What indicators suggest that a performance...Ch. 6 - What criteria determine whether a company can...Ch. 6 - We recognize service revenue either at one point...Ch. 6 - What characteristics make a good or service a...Ch. 6 - Prob. 6.6Q Ch. 6 - What must a contract include for the contract to...Ch. 6 - How might the definition of probable affect...Ch. 6 - When a contract includes an option to buy...Ch. 6 - Prob. 6.10Q

To indicate: The specific codification citation which indicate that an entity is a principal, and mention the indicators.

To indicate: The location of note for G Incorporation’s revenue recognition policy.

To discuss: The G Incorporation’s reason for its revenue recognition choices, also explain whether G Incorporation’s reasoning is acceptable.

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Chapter 6 Solutions