Question 1

Revenue recognition means that:

Accepted Answer

A)  revenue is not recorded until payment by the customer. 
B)  the recording of expenses is delayed until the related revenue has been earned. 
C)  revenue is recorded when earned. 
D)  revenue is recorded when a deposit is received. 
A)  revenue is not recorded until payment by the customer. 
B)  the recording of expenses is delayed until the related revenue has been earned. 
C)  revenue is recorded when earned. 
D)  revenue is recorded when a deposit is received.

Question 2

The profit for a particular project of Blue Fin Ltd, using the percentage of completion method, was $470 000 for year 1 and $690 000 for year 2 (completion). What difference would there be to profit for year 1 if the completion of production method were used?

Accepted Answer

A)  Profit would be $470 000 lower. 
B)  Profit would be $470 000 higher. 
C)  Profit would be $690 000 higher. 
D)  There would be no difference. 
A)  Profit would be $470 000 lower. 
B)  Profit would be $470 000 higher. 
C)  Profit would be $690 000 higher. 
D)  There would be no difference.

Question 3

At what point would you expect revenue from sales of building materials to be recognised?

Accepted Answer

A)  During production 
B)  On completion of production 
C)  At point of sale or delivery 
D)  When cash is received 
A)  During production 
B)  On completion of production 
C)  At point of sale or delivery 
D)  When cash is received

Revenue recognition means that:

The profit for a particular project of Blue Fin Ltd, using the percentage of completion method, was $470 000 for year 1 and $690 000 for year 2 (completion). What difference would there be to profit for year 1 if the completion of production method were used?

At what point would you expect revenue from sales of building materials to be recognised?

Introduction to Financial Accounting

Measuring and Evaluating Financial Position and Financial Performance

The Double-Entry System

Record-Keeping

Accrual Accounting Adjustments

Financial Reporting Principles, Accounting Standards and Auditing

Internal Control and Cash

Accounts Receivable and Further Record-Keeping

Inventory

Noncurrent Assets

Liabilities

Investments and Shareholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Sustainability Reporting

Filters

Exam 13: Revenue and Expense Recognition: Additional Concepts

Revenue recognition means that:

The profit for a particular project of Blue Fin Ltd, using the percentage of completion method, was $470 000 for year 1 and $690 000 for year 2 (completion). What difference would there be to profit for year 1 if the completion of production method were used?

At what point would you expect revenue from sales of building materials to be recognised?

Introduction to Financial Accounting

Measuring and Evaluating Financial Position and Financial Performance

The Double-Entry System

Record-Keeping

Accrual Accounting Adjustments

Financial Reporting Principles, Accounting Standards and Auditing

Internal Control and Cash

Accounts Receivable and Further Record-Keeping

Inventory

Noncurrent Assets

Liabilities

Investments and Shareholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Sustainability Reporting

Filters