Question 1

If the goods sold to a customer are damaged in shipment, the buyer normally asks for a(n)

Accepted Answer

A)  sales discount. 
B)  accounts receivable. 
C)  sales allowance. 
D)  purchase discount. 
A)  sales discount. 
B)  accounts receivable. 
C)  sales allowance. 
D)  purchase discount.

Question 2

Use the following information for questions 51-53.
Big Bump Mountain 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 Big Bump Mountain recognize revenue for the corporate tickets redeemed?

Accepted Answer

A)  at the time of sale 
B)  on the day they are redeemed for a ticket 
C)  throughout the ski season 
D)  at the end of the ski season 
A)  at the time of sale 
B)  on the day they are redeemed for a ticket 
C)  throughout the ski season 
D)  at the end of the ski season

Question 3

When making sales, there are costs that may be incurred in the future; an example of a cost is bad debts.

Accepted Answer

A) True 
 B)False

Question 4

Khouri Construction agreed to build a shopping centre for $25,000,000 over the next four years. Estimated cost for years one through four are: $7,500,000; $5,000,000; $5,000,000; and $2,500,000. Estimated profit or loss for year one, assuming the percentage of completion method, would be

Accepted Answer

A)  $(1,250,000). 
B)  $0. 
C)  $1,250,000. 
D)  $1,875,000. 
A)  $(1,250,000). 
B)  $0. 
C)  $1,250,000. 
D)  $1,875,000.

Question 5

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

Accepted Answer

A)  sales revenue. 
B)  gross profit. 
C)  operating income. 
D)  net income. 
A)  sales revenue. 
B)  gross profit. 
C)  operating income. 
D)  net income.

Question 6

If a $12,500 sale is made on September 21 with terms 2/10 net 30 and collection is made on October 2, the amount collected is

Accepted Answer

A)  $12,250. 
B)  $10,000. 
C)  $12,750. 
D)  $12,500. 
A)  $12,250. 
B)  $10,000. 
C)  $12,750. 
D)  $12,500.

Question 7

When a company uses a mutli step income statement, all revenues are presented first regardless of the source.

Accepted Answer

A) True 
 B)False

Question 8

Under the accrual basis, accounting revenues are recognized when they are earned regardless of whether the related cash was received by the company.

Accepted Answer

A) True 
 B)False

Question 9

When revenue is earned from the sale of goods, all of the following criteria must be met before revenue can be recognized EXCEPT

Accepted Answer

A)  revenue must be earned. 
B)  the amount earned is measurable. 
C)  all sales returns and allowances have been recorded. 
D)  there is no continuing involvement or control over the goods. 
A)  revenue must be earned. 
B)  the amount earned is measurable. 
C)  all sales returns and allowances have been recorded. 
D)  there is no continuing involvement or control over the goods.

Question 10

Use the following information for questions 51-53.
Big Bump Mountain 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 Big Bump Mountain recognize revenue for the season tickets?

Accepted Answer

A)  at the time of sale 
B)  on the day the mountain first opens for skiing 
C)  throughout the ski season 
D)  at the end of the ski season 
A)  at the time of sale 
B)  on the day the mountain first opens for skiing 
C)  throughout the ski season 
D)  at the end of the ski season

Question 11

Many service contracts require the seller to provide services for multiple periods. In order to properly recognize revenue, you must use the percentage of completion method.

Accepted Answer

A) True 
 B)False

Question 12

In retail stores revenue is normally recognized at the time of sale.

Accepted Answer

A) True 
 B)False

Question 13

Bailey Consulting, a Winnipeg based Company, has just signed a contract to complete a strategic plan for a local business. This plan will likely take 2 to 3 months to complete. How should Bailey Consulting recognize revenue?

Accepted Answer

A)  percentage of completion method 
B)  equally over the term of the contract 
C)  at the time of contract signing 
D)  all revenue at the end of the job 
A)  percentage of completion method 
B)  equally over the term of the contract 
C)  at the time of contract signing 
D)  all revenue at the end of the job

Question 14

EPS may be reported either on the statement of financial position or the statement of income.

Accepted Answer

A) True 
 B)False

Question 15

The incentive built in for prompt payment of cash by a customer for a credit sale is called a cash discount.

Accepted Answer

A) True 
 B)False

Question 16

Use the following information for questions 51-53.
Big Bump Mountain 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.
-How should Big Bump Mountain account for the corporate tickets NOT redeemed?

Accepted Answer

A)  They should estimate an amount at the time of sale and recognize it as revenue then. 
B)  They should estimate an amount at the time of sale and recognize it as revenue evenly throughout the ski season. 
C)  They should estimate an amount at the time of sale and recognize it as revenue proportionally every time a coupon is redeemed. 
D)  They should recognize it as revenue at the end of the ski season. 
A)  They should estimate an amount at the time of sale and recognize it as revenue then. 
B)  They should estimate an amount at the time of sale and recognize it as revenue evenly throughout the ski season. 
C)  They should estimate an amount at the time of sale and recognize it as revenue proportionally every time a coupon is redeemed. 
D)  They should recognize it as revenue at the end of the ski season.

If the goods sold to a customer are damaged in shipment, the buyer normally asks for a(n)

When making sales, there are costs that may be incurred in the future; an example of a cost is bad debts.

Khouri Construction agreed to build a shopping centre for $25,000,000 over the next four years. Estimated cost for years one through four are: $7,500,000; $5,000,000; $5,000,000; and $2,500,000. Estimated profit or loss for year one, assuming the percentage of completion method, would be

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

If a $12,500 sale is made on September 21 with terms 2/10 net 30 and collection is made on October 2, the amount collected is

When a company uses a mutli step income statement, all revenues are presented first regardless of the source.

Under the accrual basis, accounting revenues are recognized when they are earned regardless of whether the related cash was received by the company.

When revenue is earned from the sale of goods, all of the following criteria must be met before revenue can be recognized EXCEPT

Many service contracts require the seller to provide services for multiple periods. In order to properly recognize revenue, you must use the percentage of completion method.

In retail stores revenue is normally recognized at the time of sale.

Bailey Consulting, a Winnipeg based Company, has just signed a contract to complete a strategic plan for a local business. This plan will likely take 2 to 3 months to complete. How should Bailey Consulting recognize revenue?

EPS may be reported either on the statement of financial position or the statement of income.

The incentive built in for prompt payment of cash by a customer for a credit sale is called a cash discount.

Overview of Corporate Financial Reporting

Nalyzing Transaction and Their Effect on Financial Statement

Double-Entry Accounting and the Accounting Cycle

Revenue Recognition and the Statement of Income

The Statement of Cash Flows

Cash and Accounts

Inventory

Long-Term Assets

Long-Term Liabilities

Shareholders Equity

Financial Statement Analysis

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Exam 4: Revenue Recognition and the Statement of Incom

If the goods sold to a customer are damaged in shipment, the buyer normally asks for a(n)

When making sales, there are costs that may be incurred in the future; an example of a cost is bad debts.

Khouri Construction agreed to build a shopping centre for $25,000,000 over the next four years. Estimated cost for years one through four are: $7,500,000; $5,000,000; $5,000,000; and $2,500,000. Estimated profit or loss for year one, assuming the percentage of completion method, would be

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

If a $12,500 sale is made on September 21 with terms 2/10 net 30 and collection is made on October 2, the amount collected is

When a company uses a mutli step income statement, all revenues are presented first regardless of the source.

Under the accrual basis, accounting revenues are recognized when they are earned regardless of whether the related cash was received by the company.

When revenue is earned from the sale of goods, all of the following criteria must be met before revenue can be recognized EXCEPT

Many service contracts require the seller to provide services for multiple periods. In order to properly recognize revenue, you must use the percentage of completion method.

In retail stores revenue is normally recognized at the time of sale.

Bailey Consulting, a Winnipeg based Company, has just signed a contract to complete a strategic plan for a local business. This plan will likely take 2 to 3 months to complete. How should Bailey Consulting recognize revenue?

EPS may be reported either on the statement of financial position or the statement of income.

The incentive built in for prompt payment of cash by a customer for a credit sale is called a cash discount.

Overview of Corporate Financial Reporting

Nalyzing Transaction and Their Effect on Financial Statement

Double-Entry Accounting and the Accounting Cycle

Revenue Recognition and the Statement of Income

The Statement of Cash Flows

Cash and Accounts

Inventory

Long-Term Assets

Long-Term Liabilities

Shareholders Equity

Financial Statement Analysis

Filters