FUNDAMENTALS OF FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781260823875
Author: PHILLIPS
Publisher: MCGRAW-HILL CUSTOM PUBLISHING
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Textbook Question
Chapter 3, Problem 4MC
Which of the following would the core revenue recognition principle consider a contract?
- a. A concert ticket issued by a Ticketmaster customer service representative
- b. An order automatically generated by Target’s computer system to restock its shelves
- c. A rental agreement signed by Gables Residential for an apartment rented by a tenant
- d. All of the above
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Which of the following situations may give rise to unearned revenue?
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Providing trade credit to customers.
b.
Selling inventory.
c.
Providing manufacturer warranties.
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Selling magazine subscriptions.
In general, revenue is recognized whena. The sales price has been collectedb. A purchase order has been receivedc. A good or service has been delivered to a customerd. A contract has been signed
According to U.S. GAAP, when should revenue be recognized?a. When cash is received from the customerb. When the service is performed or the goods have been delivered to the customerc. When the goods or services have been priced and offered for saled. At the stated date in the contract
Chapter 3 Solutions
FUNDAMENTALS OF FINANCIAL ACCOUNTING
Ch. 3 - Prob. 1QCh. 3 - When accounting was developed in the 14th and 15th...Ch. 3 - Define accrual basis accounting and contrast it...Ch. 3 - Prob. 4QCh. 3 - What two questions are answered by the core...Ch. 3 - Prob. 6QCh. 3 - What is a performance obligation?Ch. 3 - How do you report revenue from a contract that...Ch. 3 - Explain the expense recognition principle...Ch. 3 - Explain why stockholders equity is increased by...
Ch. 3 - Explain why revenues are recorded as credits and...Ch. 3 - Complete the following table by entering either...Ch. 3 - Complete the following table by entering either...Ch. 3 - Prob. 14QCh. 3 - Prob. 15QCh. 3 - What is the difference between Accounts Receivable...Ch. 3 - What is the difference between Accounts Payable...Ch. 3 - For each of the following situations, indicate...Ch. 3 - Prob. 19QCh. 3 - Which of the following items is not a specific...Ch. 3 - Which of the following accounts normally has a...Ch. 3 - Prob. 3MCCh. 3 - Which of the following would the core revenue...Ch. 3 - If a company incorrectly records a payment as an...Ch. 3 - Prob. 6MCCh. 3 - Prob. 7MCCh. 3 - Which account is least likely to be debited when...Ch. 3 - Webby Corporation reported the following amounts...Ch. 3 - Which of the following is the entry to be recorded...Ch. 3 - Identifying Performance Obligations Lakeside...Ch. 3 - Prob. 2MECh. 3 - Identifying Accrual Basis Revenues The following...Ch. 3 - Identifying Accrual Basis Expenses The following...Ch. 3 - Recording Accrual Basis Revenues For each of the...Ch. 3 - Recording Accrual Basis Expenses For each of the...Ch. 3 - Prob. 7MECh. 3 - Prob. 8MECh. 3 - Prob. 9MECh. 3 - Prob. 10MECh. 3 - Identifying Accrual Basis Expenses The following...Ch. 3 - Prob. 12MECh. 3 - Recording Accrual Basis Expenses For each of the...Ch. 3 - Prob. 14MECh. 3 - Preparing Accrual Basis Journal Entries for...Ch. 3 - Preparing Accrual Basis Journal Entries for...Ch. 3 - Preparing Accrual Basis Journal Entries and...Ch. 3 - Determining the Accounting Equation Effects of...Ch. 3 - Prob. 19MECh. 3 - Preparing an Income Statement and Calculating Net...Ch. 3 - Preparing Financial Statements from a Trial...Ch. 3 - Preparing an Income Statement and Calculating Net...Ch. 3 - Calculating and Interpreting Net Profit Margin...Ch. 3 - Calculating and Interpreting Net Profit Margin...Ch. 3 - Matching Definitions with Terms Match each...Ch. 3 - Matching Definitions with Terms Match each...Ch. 3 - Identifying Performance Obligations and Timing...Ch. 3 - Identifying Accrual Basis Revenues According to...Ch. 3 - Identifying Accrual Basis Revenues According to...Ch. 3 - Identifying Accrual Basis Expenses Under accrual...Ch. 3 - Identifying Accrual Basis Expenses Under accrual...Ch. 3 - Determining Accounting Equation Effects and Net...Ch. 3 - Determining Accounting Equation Effects and Net...Ch. 3 - Recording Journal Entries and Determining Net...Ch. 3 - Prob. 11ECh. 3 - Recording Journal Entries and Determining Net...Ch. 3 - Recording and Posting Accrual Basis Journal...Ch. 3 - Analyzing Transactions from the Perspectives of...Ch. 3 - Prob. 15ECh. 3 - Determining Accounting Equation Effects of Several...Ch. 3 - Preparing Journal Entries For each of the...Ch. 3 - Prob. 18ECh. 3 - Creating an Unadjusted Trial Balance Based on the...Ch. 3 - Inferring Transactions, Creating Financial...Ch. 3 - Determining the Effects of Various Transactions EZ...Ch. 3 - COACHED PROBLEMS Recording Nonquantitative Journal...Ch. 3 - Prob. 2CPCh. 3 - Prob. 3CPCh. 3 - Prob. 4CPCh. 3 - Prob. 1PACh. 3 - Recording Journal Entries Diana Mark is the...Ch. 3 - Analyzing the Effects of Transactions Using...Ch. 3 - Prob. 4PACh. 3 - Prob. 1PBCh. 3 - Prob. 2PBCh. 3 - Analyzing the Effects of Transactions Using...Ch. 3 - Analyzing, Journalizing, and Interpreting Business...Ch. 3 - Prob. 1COPCh. 3 - Finding Financial Information Refer to the...Ch. 3 - Comparing Financial Information Refer to the...Ch. 3 - Prob. 4SDCCh. 3 - Ethical Decision Making: A Mini-Case Mike Lynch is...Ch. 3 - Accounting for Business Operations Starting in...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The first step in the revenue recognition process is determining if a contract is in place between the seller and the customer. A contract is an agreement between two or more parties that creates enforceable rights and obligations. The standard states that a contract may be written, oral, or implied by customary business practices. To be a contract, the accounting standard states that it must meet five criteria. Required: Discuss the criteria necessary for a contract to be considered under the revenue recognition process. How would a company account for a contract that does not meet the criteria?arrow_forwardAt what point does revenue recognition occur? A. When the purchase order is received B. When the seller receives the money for the job C. When the seller has met performance D. When the purchaser makes paymentarrow_forwardABC Company has shipped goods to one of its customers FOB destination. ABC Company will recognize sales revenue when: O their customer has received and inspected the goods. O the customer pays the invoice. O the goods leave ABC's shipping dock. the two parties agree that revenue should be recognized. O the goods are received by the customer.arrow_forward
- A contract between one or more parties creates: a. the date that cash is paid by the customer b. enforceable rights and obligations for the parties c. revenue for recognition d. the fixed amount of payments for the good or servicearrow_forwardIn a sales transaction, which of the following is an assertion of existence or occurrence:a. All sales transactions that occur are recordedb. Sales transactions have been recorded at the correct periodc. The sales transaction has been recorded according to the amount that has been sent and the correct amount has been invoicedd. Sales transactions that have been recorded are valid sales to customersarrow_forwardWhich of the following documents is issued by a customer to provide information about the nature of a payment made for goods or services? a) A Remittance advice b) A Credit Notec) An Invoiced) A Quotationarrow_forward
- Topic: REVENUE FROM CONTRACTS WITH CUSTOMERS Requirement: Compute for the sale revenue to be recognized from the transaction above.arrow_forward1. Please explain whether the item is an example of IPE from a transaction process, and 2. Please explain why or why not in some level of detail: Item IPE? Why or why not? A. A payroll exception report prepared by ADP B. A report containing new vendors approved by the purchasing department C. An unpaid vendor invoice D. A list of product liability claims from customers E. The allocation of overhead to various products in production F. Warranty conditions provided to customers on sales contracts G. The bank reconciliation prepared by the Company's bankarrow_forwardA company that provides a service or product to a customer on credit has an __________ from that customer.arrow_forward
- Which of the following conditions would support recognition of revenue? The seller’s price to the buyer is being negotiated. Delivery has occurred or services have been provided. Collection is possible. Significant risks and rewards of ownership of the goods will soon be transferred to the purchaser by the seller.arrow_forwardFor sellers of goods, the revenue recognition principle generally requires that revenues be recorded when the following conditions are met: The item is manufactured When the goods are received by the buy The sales order is received ● When title and risks of ownership pass to the buyer.arrow_forwardst page of the chapter. 2. Which of the following would result in the recognition of revenue? a. A manufacturer delivers a component to a supplier, b. A retailer sells a product to a consumer. C. A bank provides a service to a customer. d. All of the above would result in the recognition of revenue.arrow_forward
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