Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 8, Problem 8.4MC
The transaction price must reflect the time value of money if:
- a. The vendor expects the period between customer payment and delivery of goods or services will be less than two years.
- b. The contract has a financing component that is significant to the contract.
- c. The interest rate in the contract is higher than 13%.
- d. Consideration would not differ if paid in cash or under normal credit terms.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Which of the following is true?
Short-term notes payable should be discounted at its present value, more so, if it constitutes a financing transaction and the imputed interest can be measured without undue cost or effort.
Transaction costs of issuing financial liabilities are expensed outright.
The present value of a serial note's principal is computed by using the PV of 1 as the present value factor.
Notes payable are obligations supported by creditor's promissory notes.
It is the risk of a possible future change in one or more of a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract.
Insurance risk
Financial risk
Operating risk
Credit risk
You are a business manager. During the period, you have authorized the acquisition of a machine that will be used in your company’s manufacturing activities in the next 5 years. In your selection of an appropriate accounting policy for the recognition and measurement of the machine, which of the following reporting standards is most relevant?
PAS 1
PAS 2
PAS 16
PAS 32
Under current standards, a subsequent expenditure on an item of property, plant and equipment is most likely to be
capitalized to the asset account.
debited to the related accumulated…
1. Modes of extinguishing obligations when creditor abandons his right to collect. (PLEASE EXPLAIN YOUR ANSWER)
A. Condonation
B. Forfeiture
C. Debt
D. Damages
2. Fall after the increase reaches a certain variable amount, this is called: (PLEASE EXPLAIN YOUR ANSWER)
A. Process factor
B. Law of return
C. Inflation
D. Supply & demand
3. It is always true that the effective rate is greater than the nominal rate when m ≥ 2. (PLEASE EXPLAIN YOUR ANSWER)
A. True
B. False
4. (A/F, i%, N) = (A/P, i%, N) + i (PLEASE EXPLAIN YOUR ANSWER)
A. True
B. False
Chapter 8 Solutions
Intermediate Accounting
Ch. 8 - What are the primary issues involved in revenue...Ch. 8 - What is the fundamental principle underlying the...Ch. 8 - What is the fundamental principle underlying the...Ch. 8 - Prob. 8.4QCh. 8 - Prob. 8.5QCh. 8 - How is a performance obligation defined?Ch. 8 - What are the two criteria to define a good or...Ch. 8 - Prob. 8.8QCh. 8 - What principles regarding timing and measurement...Ch. 8 - Prob. 8.10Q
Ch. 8 - What is variable consideration and what factors...Ch. 8 - Describe and contrast the two approaches used to...Ch. 8 - Prob. 8.13QCh. 8 - What factors should accountants consider to...Ch. 8 - Prob. 8.15QCh. 8 - How does a seller account for any consideration...Ch. 8 - Prob. 8.17QCh. 8 - What are the two exceptions to the general rule...Ch. 8 - What are the three criteria required to recognize...Ch. 8 - When an entity does not meet the three criteria...Ch. 8 - Prob. 8.21QCh. 8 - Prob. 8.22QCh. 8 - How does a firm estimate the degree completed...Ch. 8 - Can a firm record inventory out on consignment as...Ch. 8 - What method do agents in a transaction use to...Ch. 8 - Prob. 8.26QCh. 8 - What qualitative disclosures do the standards...Ch. 8 - All of the following are elements of a contract...Ch. 8 - Prob. 8.2MCCh. 8 - Telecom Co. enters into a two-year contract with a...Ch. 8 - The transaction price must reflect the time value...Ch. 8 - Prob. 8.5MCCh. 8 - When allocating the transaction price to separate...Ch. 8 - Which of the following indicators is not...Ch. 8 - During Yoar 1 Moriwothor Construction Company...Ch. 8 - All of the following are indicators that the...Ch. 8 - Prob. 8.10MCCh. 8 - Prob. 8.11MCCh. 8 - Identify a Contract with a Customer. Complete the...Ch. 8 - Prob. 8.2BECh. 8 - Identifying Performance Obligations. Perfect Party...Ch. 8 - Identifying Performance Obligations. Perfect Party...Ch. 8 - Estimating Variable Consideration. Gear Garage...Ch. 8 - Estimating Variable Consideration. Using the...Ch. 8 - Estimating Variable Consideration. Sellet...Ch. 8 - Prob. 8.8BECh. 8 - Prob. 8.9BECh. 8 - Allocation of Transaction Price. Martin Software...Ch. 8 - Prob. 8.11BECh. 8 - Allocation of Transaction Price. Sycamore Sidewalk...Ch. 8 - Allocation of Transaction Price. Sycamore enters...Ch. 8 - Prob. 8.14BECh. 8 - Allocation of Transaction Price. Using the...Ch. 8 - When to Recognize Revenue. For each scenario...Ch. 8 - Prob. 8.17BECh. 8 - Prob. 8.18BECh. 8 - Prob. 8.19BECh. 8 - Prob. 8.20BECh. 8 - Sales with the Right of Return. Both incorporated...Ch. 8 - Sales with the Right of Return. Using the...Ch. 8 - Sales Returns. Historically, about 5% or the...Ch. 8 - Sales on Consignment. Hanna Lighting recertify...Ch. 8 - Determining Performance Obligations. Pagit Inc, a...Ch. 8 - Prob. 8.2ECh. 8 - Estimating Variable Consideration. King Rat Pest...Ch. 8 - Prob. 8.4ECh. 8 - Prob. 8.5ECh. 8 - Prob. 8.6ECh. 8 - Allocation of Variable Consideration. Green-Up Inc...Ch. 8 - Allocation of Variable Consideration. Green-Up Inc...Ch. 8 - Prob. 8.9ECh. 8 - Prob. 8.10ECh. 8 - Determination of When to Recognize Revenue. Far...Ch. 8 - Prob. 8.12ECh. 8 - Prob. 8.13ECh. 8 - Prob. 8.14ECh. 8 - Prob. 8.15ECh. 8 - Prob. 8.16ECh. 8 - Prob. 8.17ECh. 8 - Prob. 8.18ECh. 8 - Prob. 8.19ECh. 8 - Other Principal Agent Transactions, Net Revenue...Ch. 8 - Prob. 8.1PCh. 8 - Prob. 8.2PCh. 8 - Prob. 8.3PCh. 8 - Determining When to Recognize Revenue. Megrew...Ch. 8 - Prob. 8.5PCh. 8 - Prob. 8.6PCh. 8 - Prob. 8.7PCh. 8 - Prob. 8.8PCh. 8 - Prob. 8.9PCh. 8 - Prob. 8.10PCh. 8 - Prob. 8.11PCh. 8 - Prob. 1JCCh. 8 - Prob. 1FSACCh. 8 - Prob. 1SSCCh. 8 - Basis for Conclusions Case 1: Control According to...
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
- True or False: When a forward contract is settled in cash, the short side of the contract must pay money when thefuture realized price at the expiration of the contract is low.arrow_forwardWhen deciding whether or not to take a trade discount, the cost of borrowing funds should be compared to the effective annual rate (EAR) of trade credit to determine if the cash discount should be taken. True Falsearrow_forwardTo account for a down payment, adjust the _____ of the loan by subtracting it from the loan amount. O present value (pv) future value (fv) rate O typearrow_forward
- 5. Which of the following will make Murabaha invalid? a. If payment is made in installments b. if the supplier is not paid directly by the bank. c. Price not agreed. d. Price not fully paid.arrow_forwardWhat do firms use to record the sales value of a transaction when a note receivable has either an unreasonable rate of interest or no interest rate stated? O A. Firms uses the face value of the note to record the sales value of a transaction when a note receivable has either an unreasonable rate of interest or no interest stated. O B. Firms uses the cost of the goods or services provided plus a mark-up to record the sales value of a transaction when a note receivable has either an unreasonable rate of interest or no interest rate stated. O C. An observed market price is the most reliable evidence of an asset's fair value. Fair value estimates are based on the market value of the goods or services provided, or the note. If a company cannot obtain the fair value of the goods or services, the present value of the note is found using the stated rate of interest. O D. An observed market price is the most reliable evidence of an asset's fair value. If a company receives a note in exchange…arrow_forwardWhen a deposit on returnable containers is forfeited, the firm holding the deposit will experience: A. a decrease in cost of goods sold. B. an increase in current liabilities. C. an increase in account receivable. D. an increase in revenue.arrow_forward
- The value of a series of payments is similar to the maturity value in a compounding transaction. False Truearrow_forwardI need answer ASAP 1.b)Bills payable and promissory notes are negotiable instruments and are used mostly to replace_____Select one:O a. financial meansO b. term loansO c. long-term creditO d. trade creditO e. overdraft facilitiesarrow_forwardExplain the trade credit facility provided by some companies to their customers that allow them to manage their day-to-day liquidity situation and calculate the opportunity cost of an invoice that specifies the following conditions, as shown below (a. – c.):a) conditions: 1.25/10, n/30.b) conditions: 1.25/10, n/60.c) conditions: 1.5/10, n/60.arrow_forward
- narubhaiarrow_forwardThe objectives of Receivables Management are as follows: a. All of above O b. To maintain the debtors at minimum according to the credit policy offered to customers. O C. To control the cost of receivables, cost of collection, administrative expenses, bad debts and opportunity cost of funds blocked in the receivables. O d. To obtain optimum (non maximum) value of sales;arrow_forwardWhich of the following is true about forward contract expiration? a.A deliverable forward contract stipulates that the short will pay the agreed-upon price to the long, who in turn will deliver the underlying asset to the short. b.Under cash settlement, it permits the short to pay the net cash value of the position on the delivery date. c.Under cash settlement, it permits the long to pay the net cash value of the position on the delivery date. d.Under cash settlement, it permits the long and short to pay the net cash value of the position on the delivery date.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Business/Professional Ethics Directors/Executives...AccountingISBN:9781337485913Author:BROOKSPublisher:Cengage
Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENTPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Business/Professional Ethics Directors/Executives...
Accounting
ISBN:9781337485913
Author:BROOKS
Publisher:Cengage
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Chapter 19 Accounting for Income Taxes Part 1; Author: Vicki Stewart;https://www.youtube.com/watch?v=FMjwcdZhLoE;License: Standard Youtube License