Exam 6: Revenue Recognition Issues

According to IFRS 15,revenue is 'income arising in the course of an entity's ordinary activities.' Income represents an increase in 'economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in an increase in equity,other than those relating to contributions from equity participants'.(IFRS 15)

Permanent differences are created by revenue and expense items,which are recognized for accounting purposes but not for tax purposes or which are recognized for tax purposes but not for accounting purposes.

Which accounting principle is designed to prevent abuses of flexibility in revenue recognition?

What is the preferred accounting treatment of government grants relating to assets?

In which country a loss carry-forward allows the entity to offset future taxable income against the accumulated losses for up to 20 years?

IFRS 15 states that,revenue associated with a transaction should be recognized as a function of the stage,or percentage of completion of the transaction,at the end of the reporting period,when the outcome of a transaction involving the rendering of services can be estimated ____.

The basic principle of deferred taxation is that the difference is not expected to be reversed in future periods.

Loss carry-back means that the losses of one period can be used to offset profits made in previous periods,allowing a tax refund.

When accounting for and reporting government grants relating to assets,the entity should record the grant directly as an increase in shareholders' equity.

A change in accounting policy should be made only:

Which method is preferred by the IASB to account for long-term contracts?

There are two kinds of differences between income tax rules and accounting rules.What are these called?

Which of the following statements does not define a discontinued operation?

Which of the following methods is not used to determine the percentage of completion of a transaction?

According to IAS 18,revenue is 'the gross inflow of economic benefits during the period arising in the course of the ordinary activities of an entity when those inflows result in increases in equity,other than increases relating to contributions from equity participants'.(IAS 18)

Deferred tax is created when income tax expense is based on:

Total comprehensive income is defined as the 'change in equity during a period resulting from transactions and other events,other than those changes resulting from transactions with owners in their capacity as owners'.

Which of the following equations is correct?

When the conditions for revenue recognition are satisfied,on which basis should interest be recognized?

Development costs can be capitalized and amortized in the income statement over several periods while the full amount is tax deductible in the period in which the development costs were incurred.Which of the following accounting items will be generated by this temporary difference?