**Understanding the Current Revenue Recognition Principle**The image displays a multiple-choice question designed to test knowledge of the current revenue recognition principle in accounting. It provides four possible answers, asking which one best describes this principle.1. **Recognize revenue in the accounting period when the performance obligation is satisfied.**2. **Recognize revenue in the accounting period when cash is received.**3. **Recognize revenue when it is earned.**4. **Identify separate performance obligations in the contract.**The question focuses on determining the correct timing and criteria for recognizing revenue according to modern accounting standards, specifically those outlined by the International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP). The principle aims to ensure that revenue is accurately reported in relation to when a business has fulfilled its contractual obligations, rather than relying solely on cash transactions.

Revenue means the amount earned by selling the goods or services. Revenue is recognized in books of…

Answered: Which of the following best describes…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Revenue is recognized for sold consignment goods when a. The consignee receives the goods b. When the consignment contract has been agreed upon c. The goods are sold by the consignee to the final customers d. When the consignment contract has been signed by both parties
Direct answer please. No explanation required. Also make sure that the answer should be 100% correct
Why Revenue is recognized when performance obligations are satisfied, not necessarily when cash is received?
Which of the following best represents the matching principle criteria?A. Expenses are reported in the period in which they were incurred.B. Expenses may be reported in a different period than the matching revenues.C. Revenue and expenses are matched based on when expenses are paid.D. Revenue is recognized when an order occurs and not when the actual sale is initiated
Discuss the importance of accounting for multiple performance obligations in a revenue arrangement separately, and the challenges involved.
Which of the following is not a condition in identifying the contract with the customer as per IFRS 15? a- Each party's rights with regard to the goods or services concerned can be identified b- It is certain that the entity will collect the consideration to which it is entitled c- The entity and the customer have approved the contract and are committed to perform their contractual obligations d- The payment terms can be identified
Under the new revenue recognition guidance in ASC Topic 606, which of the following statements is true regarding contracts with customer options? In some cases where customers have an option to acquire additional goods or services, an evaluation is required to determine if the option creates an additional performance obligation. An additional performance obligation is created if the customer could obtain the same rights to additional goods or services without entering the contract. An additional performance obligation is created if the option provides the customer a right to purchase the goods or services at the stand-alone selling price for those goods or services. It is generally not considered a performance obligation when a retailer grants a "customer appreciation dividend" to a customer.
Why does Recognizee revenue when (or as) each performance obligation is satisfied,” is important?
Discuss the concept of matching principle and its significance in determining the timing of revenue and expense recognition.
What is a repurchase agreement (product financing)arrangement? How should a product repurchase agreementbe reported in the financial statements?
Costs that are directly associated with the earning of revenue are recognized as in the same period where the related revenue is recognized. * expense Systematic and rational allocation Immediate recognition O Matching O Cost-benefit
Describe the conditions when contract assets and liabilitiesare recognized and presented in financial statements.

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