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REVENUE RECOGNITION QUIZ 1. True or false: The new revenue recognition standard is aimed at a few industries and will not affect most companies. 2. True or false: Revenue recognition under U.S. GAAP and IFRS will now be identical. 3. Choose all that apply: The industries most impacted by the standard are: A. Pharmaceutical B. Retail C. Media and telecom D. Consumer staples E. Software F. Aerospace and defense 4. True or false: The identification of customer contracts and related performance obligations are key to the standard. 5. True or false: Companies must restate the income statements for prior years to show application of the new standard. 6. Choose all that apply: Transactions excluded from the standard include A. Lease contracts B. Insurance contracts C. Financial instruments D. Guarantees (other than product warranties) E. Certainnonmonetary exchanges F. Contracts with parties other than customers (e.g., collaborations) 7. True or false: Comparability across companies will be enhanced since ASC 606 provides clear rules, by industry, for when and how to recognize revenues. 8. Choose all that apply: The following ratios may be impacted by adoption of the new standard A. Revenue growth B. Net margin C. Return on equity D. Price to earnings multiples E. Return on assets F. Debt to equity G. Current ratio

REVENUE RECOGNITION QUIZ 1. True or false: The new revenue recognition standard is aimed at a few industries and will not affect most companies. 2. True or false: Revenue recognition under U.S. GAAP and IFRS will now be identical. 3. Choose all that apply: The industries most impacted by the standard are: A. Pharmaceutical B. Retail C. Media and telecom D. Consumer staples E. Software F. Aerospace and defense 4. True or false: The identification of customer contracts and related performance obligations are key to the standard. 5. True or false: Companies must restate the income statements for prior years to show application of the new standard. 6. Choose all that apply: Transactions excluded from the standard include A. Lease contracts B. Insurance contracts C. Financial instruments D. Guarantees (other than product warranties) E. Certainnonmonetary exchanges F. Contracts with parties other than customers (e.g., collaborations) 7. True or false: Comparability across companies will be enhanced since ASC 606 provides clear rules, by industry, for when and how to recognize revenues. 8. Choose all that apply: The following ratios may be impacted by adoption of the new standard A. Revenue growth B. Net margin C. Return on equity D. Price to earnings multiples E. Return on assets F. Debt to equity G. Current ratio

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 1TP: Review the new revenue recognition guidance issued by the Financial Accounting Standards Board...
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In the Quiz attached Question#8,

Why debt to equity and current ratios may be impacted?

REVENUE RECOGNITION QUIZ 1. True or false: The new revenue recognition standard is aimed at a few industries and will not affect most companies. 2. True or false: Revenue recognition under U.S. GAAP and IFRS will now be identical. 3. Choose all that apply: The industries most impacted by the standard are: A. Pharmaceutical B. Retail C. Media and telecom D. Consumer staples E. Software F. Aerospace and defense 4. True or false: The identification of customer contracts and related performance obligations are key to the standard. 5. True or false: Companies must restate the income statements for prior years to show application of the new standard. 6. Choose all that apply: Transactions excluded from the standard include A. Lease contracts B. Insurance contracts C. Financial instruments D. Guarantees (other than product warranties) E. Certainnonmonetary exchanges F. Contracts with parties other than customers (e.g., collaborations) 7. True or false: Comparability across companies will be enhanced since ASC 606 provides clear rules, by industry, for when and how to recognize revenues. 8. Choose all that apply: The following ratios may be impacted by adoption of the new standard A. Revenue growth B. Net margin C. Return on equity D. Price to earnings multiples E. Return on assets F. Debt to equity G. Current ratio
Transcribed Image Text:REVENUE RECOGNITION QUIZ 1. True or false: The new revenue recognition standard is aimed at a few industries and will not affect most companies. 2. True or false: Revenue recognition under U.S. GAAP and IFRS will now be identical. 3. Choose all that apply: The industries most impacted by the standard are: A. Pharmaceutical B. Retail C. Media and telecom D. Consumer staples E. Software F. Aerospace and defense 4. True or false: The identification of customer contracts and related performance obligations are key to the standard. 5. True or false: Companies must restate the income statements for prior years to show application of the new standard. 6. Choose all that apply: Transactions excluded from the standard include A. Lease contracts B. Insurance contracts C. Financial instruments D. Guarantees (other than product warranties) E. Certainnonmonetary exchanges F. Contracts with parties other than customers (e.g., collaborations) 7. True or false: Comparability across companies will be enhanced since ASC 606 provides clear rules, by industry, for when and how to recognize revenues. 8. Choose all that apply: The following ratios may be impacted by adoption of the new standard A. Revenue growth B. Net margin C. Return on equity D. Price to earnings multiples E. Return on assets F. Debt to equity G. Current ratio
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