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. The following five indicators confirm the control of goods and service is transferred from the seller to buyer. 1. Obligation to pay the seller, 2. Title of the assets, 3. Ownership of the assets, 4. Risk and rewards of the ownership, and 5. Conformation of the assets transfer. To determine: Whether the seller should recognize revenue (a) over time or (b) when the product or service is completed.

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Answer 1

Question

Chapter 6, Problem 6.5DMP

To determine

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.

The following five indicators confirm the control of goods and service is transferred from the seller to buyer.

1. Obligation to pay the seller,

2. Title of the assets,

3. Ownership of the assets,

4. Risk and rewards of the ownership, and

5. Conformation of the assets transfer.

To determine: Whether the seller should recognize revenue (a) over time or (b) when the product or service is completed.

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Answer 2

Question

Chapter 6, Problem 6.5DMP

To determine

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.

The following five indicators confirm the control of goods and service is transferred from the seller to buyer.

1. Obligation to pay the seller,

2. Title of the assets,

3. Ownership of the assets,

4. Risk and rewards of the ownership, and

5. Conformation of the assets transfer.

To determine: Whether the seller should recognize revenue (a) over time or (b) when the product or service is completed.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 6, Problem 6.5DMP

To determine

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.

The following five indicators confirm the control of goods and service is transferred from the seller to buyer.

1. Obligation to pay the seller,

2. Title of the assets,

3. Ownership of the assets,

4. Risk and rewards of the ownership, and

5. Conformation of the assets transfer.

To determine: Whether the seller should recognize revenue (a) over time or (b) when the product or service is completed.

Expert Solution & Answer

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Answer 4

Question

Chapter 6, Problem 6.5DMP

To determine

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.

The following five indicators confirm the control of goods and service is transferred from the seller to buyer.

1. Obligation to pay the seller,

2. Title of the assets,

3. Ownership of the assets,

4. Risk and rewards of the ownership, and

5. Conformation of the assets transfer.

To determine: Whether the seller should recognize revenue (a) over time or (b) when the product or service is completed.

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 6.5DMP

To determine

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.

The following five indicators confirm the control of goods and service is transferred from the seller to buyer.

1. Obligation to pay the seller,

2. Title of the assets,

3. Ownership of the assets,

4. Risk and rewards of the ownership, and

5. Conformation of the assets transfer.

To determine: Whether the seller should recognize revenue (a) over time or (b) when the product or service is completed.

Answer 6

Chapter 6, Problem 6.5DMP

To determine

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.

The following five indicators confirm the control of goods and service is transferred from the seller to buyer.

1. Obligation to pay the seller,

2. Title of the assets,

3. Ownership of the assets,

4. Risk and rewards of the ownership, and

5. Conformation of the assets transfer.

To determine: Whether the seller should recognize revenue (a) over time or (b) when the product or service is completed.

Answer 7

Chapter 6, Problem 6.5DMP

To determine

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.

The following five indicators confirm the control of goods and service is transferred from the seller to buyer.

1. Obligation to pay the seller,

2. Title of the assets,

3. Ownership of the assets,

4. Risk and rewards of the ownership, and

5. Conformation of the assets transfer.

To determine: Whether the seller should recognize revenue (a) over time or (b) when the product or service is completed.

Answer 8

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Answer 9

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Answer 10

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Answer 11

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

Solution Summary: The author explains that the performance obligation is the promise made by the seller to supply goods and service to the customer on or before the contract.

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Chapter 6 Solutions