Solved

Match Each Definition to the Appropriate Term

Question 92

Matching

Match each definition to the appropriate term

Premises:
an agreed-upon change in the type, quantity, or price of goods or services to be delivered
a promise in a contract with a customer to transfer goods or services
a contract term that could cause the amount of consideration received to be less than the amount expected
an agreement between two or more parties that creates enforceable rights and obligations
the costs that a seller incurs by obtaining the contract but would not have been incurred if the contract had not been obtained
arises when a customer’s payment of consideration occurs prior to the seller’s performance
increases in assets or settlements of liabilities from activities that are the company’s ongoing major or central operations
represents the seller’s unconditional right to receive consideration from a customer
the amount of consideration a seller expects to be entitled to receive in exchange for providing the promised goods or services to the customer.
Responses:
Transaction price
Performance obligation
Contract
Receivable
Contract liability
Revenues
Incremental costs
Contract modification
Applicable constraint

Correct Answer:

an agreed-upon change in the type, quantity, or price of goods or services to be delivered
a promise in a contract with a customer to transfer goods or services
a contract term that could cause the amount of consideration received to be less than the amount expected
an agreement between two or more parties that creates enforceable rights and obligations
the costs that a seller incurs by obtaining the contract but would not have been incurred if the contract had not been obtained
arises when a customer’s payment of consideration occurs prior to the seller’s performance
increases in assets or settlements of liabilities from activities that are the company’s ongoing major or central operations
represents the seller’s unconditional right to receive consideration from a customer
the amount of consideration a seller expects to be entitled to receive in exchange for providing the promised goods or services to the customer.
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