Revenue Recognition MCQs

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Revenues of an entity are usually measured by the exchange values of the assets or liabilities involved. Recognition of revenue does not occur until






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ABC operates a catering service that specializes in business luncheons for large corporations. ABC requires customers to place their orders 2 weeks in...






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A company provides fertilization, insect control, and disease control services for a variety of trees, plants, and shrubs on a contract basis. For $50...






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On February 1, Year 1, a computer software firm agrees to program a software package. Twelve payments of $10,000 on the first of each month are to be ...






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An airline should recognize revenue from airline tickets in the period when






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A department store sells gift certificates that may be redeemed for merchandise. Each certificate expires 3 years after issuance. The revenue from the...






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To comply with the matching principle, the cost of labor services of an employee who participates in the manufacturing of a product normally should be...






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Robin Gavaskar, who recently founded a company that produces baseball bats and balls, wants to determine her companys policy for revenue recognition....






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It is proper to recognize revenue prior to the sale of merchandise when I. The revenue will be reported as an installment sale. II. The revenue will...






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The calculation of the income recognized in the third year of a 5-year construction contract accounted for using the percentage-of-completion method i...






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A company appropriately uses the completed-contract method to account for a long-term construction contract. Revenue is recognized when progress billi...






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A building contractor has a fixed-price contract to construct a large building. It is estimated that the building will take 2 years to complete. Progr...






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DEF is the consignee for 1,000 units of product X for ABC Company. ABC should recognize the revenue from these 1,000 units when






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When a right of return exists, an entity may recognize revenue from a sale of goods at the time of sale only if






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Unrealized gains and losses on trading securities should be presented in the






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A construction company has signed $1,000,000 in new contracts. During the current year, 10% of the required work for these contracts was performed. H...