Exam 4: Revenue Recognition and the Statement of Income

Use the following information for questions below Magic Mountain accounts for revenues using the contract-based approach.It operates a ski resort in the Rocky Mountains of Alberta.They sell three types of ski tickets.Season tickets are sold throughout the year,and entitle the holder to ski any day all season long.They are non-refundable.Daily tickets are sold at the mountain and are only valid for the day they are sold.Corporate group tickets are sold throughout the year.The buyer receives a package of 20 daily ticket coupons at a discounted price and the coupons can be redeemed for a day of skiing any time during the season.The skier needs to present the coupon for a ticket on the desired ski day.Unused tickets (coupons)expire at the end of the season and are non-refundable. -When should Magic Mountain recognize revenue for the corporate tickets redeemed?

Oceans Limited sold $1,750,000 worth of goods during the current year.The cost of goods sold is $1,050,000.Credit sales were $1,575,000,of which 40% were still outstanding.How much cash was collected by Oceans Ltd.?

When goods and services are bundled in a sales transaction

During the current year,BMI Corporation sold $1,250,000 in goods that cost $750,000.Cash sales were $500,000 and credit sales $750,000.BMI collected $500,000 of the credit sales during the year.What amount of revenue should BMI recognize for the year under the revenue recognition criteria of the contract-based approach?

When following ASPE,part of the revenue recognition criteria includes reasonable assurance of collectability of at least some portion of the amount earned.

The difference between gross profit and the company's operating expenses is

Indicators that control has been transferred to a customer under the contract-based approach include all of the following,except for

The final step in preparing the multi-step income statement is

Under the contract-based approach,revenue is recognized when:

There must be a receipt of cash in order for a company to recognize revenue.

Under the contract-based approach,revenue is recognized whenever a company's net position in a contract decreases.

Variable consideration in the transaction price refers to,at least in part:

In which of the following businesses would the delivery of the product and the collection of cash occur at the same time?

For a contract to exist all of the following criteria must be met,except for

The difference between sales revenue and cost of goods sold is

A single-step income statement requires several steps to reach a company's net profit or loss.

When a company reports net income,financial statement users see this as a sign that

Earnings are considered to be of higher quality if

Revenue and gains arise from a company's ordinary activities.

All of the following categories have established revenue recognition criteria except