intermediate acct test bankch18

Download Intermediate Acct Test Bankch18

Post on 24-Oct-2014

13.590 views

Category:

Documents

1 download

Embed Size (px)

TRANSCRIPT

CHAPTER 18REVENUE RECOGNITIONIFRS questions are available at the end of this chapter.

TRUE-FALSEConceptualAnswerF T T F T F T T F F T F F T F F T T F T

No.1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

DescriptionRecognition of revenue. Realization of revenue. Delayed recognition of revenue. Recognizing revenue when right of return exists. Recognizing revenue prior to product completion. Use of percentage-of-completion method. Input measure for contract progress. Reporting Construction in Process and Billings on Construction in Process. Construction in Process account balance. Recognition of revenue under completed-contract method. Principal advantage of completed-contract method. Recognizing loss on an unprofitable contract. Recognizing current period loss on a profitable contract. Recognizing revenue under completion-of-production basis. Recording a loss on an unprofitable contract. Deferring revenue under installment-sales method. Deferring gross profit under installment-sales method. Classification of deferred gross profit. Recognizing revenue under cost-recovery method. Recognizing profit under cost-recovery method.

MULTIPLE CHOICEConceptualAnswerc b a b d b d d c d b c b c b a b

No.21. 22. 23. S 24. P 25. P 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37.

DescriptionRevenue recognition principle. Definition of "realized." Definition of "earned." Revenue recognition representations. Definition of recognition. Revenue recognition principle. Recognizing revenue at point of sale. Recording sales when right of return exists. Revenue recognition when right of return exists. Revenue recognition when right of return exists. Appropriate accounting method for long-term contracts. Percentage-of-completion method. Percentage-of-completion method. Classification of progress billings and construction in process. Calculation of gross profit using percentage-of-completion. Disclosure of earned but unbilled revenues. Disadvantage of using percentage-of-completion.

18 - 2 d

Test Bank for Intermediate Accounting, Fourteenth EditionS

38.

Percentage-of-completion input measures.

MULTIPLE CHOICEConceptual (cont.)Answera c a c d a d b c c b b c d b b d b d b d d a b a dP S

No.39. 40. 41. 42. 43. 44. S 45. S 46. 47. 48. 49. 50. S 51. P 52. 53. 54. 55. 56. 57. *58. *59. *60. *61. *62. *63. *64.S

DescriptionAdvantage of completed-contract method Revenue, cost, and gross profit under the completed-contract method. Loss recognition on a long-term contract. Accounting for long-term contract losses. Criteria for revenue recognition of completion of production. Completion-of-production basis. Revenue recognition of completion of production. Treatment of estimated contract cost increase. Presentation of deferred gross profit. Appropriate use of the installment-sales method. Valuing repossessed assets. Gross profit deferred under the installment-sales method. Income realization on installment sales. Conservative revenue recognition method. Income recognition under the cost-recovery method. Income recognition under the cost-recovery method. Cost recovery basis of revenue recognition. Deposit method of revenue recognition. Cost recovery method. Types of franchising arrangements. Accounting for consignment sales. Allocation of initial franchise fee. Recognition of continuing franchise fees. Future bargain purchase option. Option to purchase franchisee's business agreement. Revenue recognition by the consignor.

These questions also appear in the Problem-Solving Survival Guide. These questions also appear in the Study Guide. *This topic is dealt with in an Appendix to the chapter.

MULTIPLE CHOICEComputationalAnswerc d b c b c c c b d c b c

No.65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75. 76. 77.

DescriptionComputation of total revenue and accounts receivable. Computation of total construction expenses. Computation of costs and profits in excess of billings balance. Computation of total revenue and construction expenses. Gross profit recognized under percentage-of-completion. Computation of construction in process amount. Percentage-of-completion method. Percentage-of-completion method. Determine cash collected on long-term construction contract. Determine gross profit using percentage-of-completion. Gross profit to be recognized using percentage-of-completion. Gross profit to be recognized using percentage-of-completion. Profit to be recognized using completed-contract method.

Revenue Recognition a 78. Gross profit to be recognized using percentage-of-completion.

18 - 3

MULTIPLE CHOICEComputational (cont.)Answerb a c b c a b c c a d b a b b b d d a d a d a c b a d c b d a

No.79. 80. 81. 82. 83. 84. 85. 86. 87. 88. 89. 90. 91. 92. 93. 94. 95. 96. 97. 98. 99. 100. 101. 102. 103. 104. *105. *106. *107. *108. *109.

DescriptionProfit to be recognized using completed-contract method. Gross profit to be recognized using percentage-of-completion. Gross profit to be recognized using completed-contract method. Computation of construction costs incurred. Gross profit recognized under percentage-of-completion. Computation of construction in process amount. Loss recognized using completed-contract method. Revenue recognition using completed-contract method. Reporting a current liability with completed-contract-method. Reporting inventory under completed-contract method. Gain recognized on repossessioninstallment sale. Calculate loss on repossessed merchandise. Calculate loss on repossessed merchandise. Interest recognized on installment sales. Calculation of deferred gross profit amount. Computation of realized gross profit amount. Computation of loss on repossession. Calculation of gross profit rate. Computation of net income from installment sales. Computation of realized and deferred gross profit. Calculation of gross profit rate. Computation of net income from installment sales. Computation of realized and deferred gross profit. Computation of realized gross profit amount. Computation of realized gross profit-cost recovery method. Revenue recognized under the cost-recovery method. Cancellation of franchise agreement. Accounting for initial and annual continuing franchise fees. Franchise fee with a bargain purchase option. Sales on consignment. Reporting inventory on consignment.

MULTIPLE CHOICECPA AdaptedAnswera b d d c b c c c c a

No.110. 111. 112. 113. 114. 115. 116. 117. 118. 119. 120.

DescriptionFASB's definition of "recognition." Determine contract costs incurred during year. Gross profit to be recognized using percentage-of-completion. Profit to be recognized using completed-contract method. Revenue recognized under completed-production method. Determine balance of installment accounts receivable. Calculate deferred gross profitinstallment sales. Calculate deferred gross profitinstallment sales. Balance of deferred gross profitinstallment sales. Reporting deferred gross profitinstallment sales. Effect of collections received on service contracts.

18 - 4

Test Bank for Intermediate Accounting, Fourteenth Edition

EXERCISESItemE18-121 E18-122 E18-123 E18-124 E18-125 E18-126 E18-127 E18-128 E18-129 E18-130 *E18-131

DescriptionRevenue recognition (essay). Revenue recognition (essay). Long-term contracts (essay). Journal entriespercentage-of-completion. Percentage-of-completion method. Percentage-of-completion method. Percentage-of-completion and completed-contract methods. Installment sales. Installment sales. Installment sales. Franchises.

PROBLEMSItemP18-132 P18-133 P18-134 P18-135

DescriptionLong-term construction project accounting. Accounting for long-term construction contracts. Long-term contract accountingcompleted-contract. Installment sales.

CHAPTER LEARNING OBJECTIVES1. 2. 3. 4. 5. 6. 7. *8. Apply the revenue recognition principle. Describe accounting issues for revenue recognition at point of sale. Apply the percentage-of-completion method for long-term contracts. Apply the completed-contract method for long-term contracts. Identify the proper accounting for losses on long-term contracts. Describe the installment-sales method of accounting. Explain the cost-recovery method of accounting. Explain revenue recognition for franchises and consignment sales.

Revenue Recognition

18 - 5

SUMMARY OF LEARNING OBJECTIVES BY QUESTIONSIte Typ Ite Typ Ite Typ Ite Typ Ite Ty Ite Typ Ite Typ

1. 2. 4. 5. 7. 8. 9. 31. 32. 33. 10. 11. S 39. 12. 13. 16. 17. 18. 47. 48. 19. 20. 58. 59.

TF TF TF TF TF TF TF MC MC MC TF TF MC TF TF TF TF TF MC MC TF TF MC MC

3. 21. 6. 27. 34. 35. 36. 37. S 38. 65. 40. 77. 79. 14. 15. 49. 50. S 51. 89. 90.P

TF MC TF MC MC MC MC MC MC MC MC MC MC TF TF MC MC MC MC MC MC MC MC MC

22. 23. 28. 29. 66. 67. 68. 69. 70. 71. 81. 85. 86. 41. 42. 91. 92. 93. 94. 95. 54. 55. 62. 63.

52. 53. 60. 61.

Learning Objective 1 S P MC 24. MC 26. P MC 25. MC 110. Learning Objective 2 MC 30. MC MC 122. E Learning Objective 3 MC 72. MC 80. MC 73. MC 82. MC 74. MC 83. MC 75. MC 84. MC 76. MC 111. MC 78. MC 112. Learning Objective 4 MC 87. MC 123. MC 88. MC 127. MC 113. MC 133. Learning Objective 5 S MC 43. MC 45. S MC 44. MC 46. Learning Objective 6 MC 96. MC 101. MC 97. MC 102. MC 98. MC 115. MC 99. MC 116. MC 100. MC 117. Learning Objective 7 MC 56. MC 103. MC 57. MC 104. Learning Objective 8* MC 64. MC 106. MC 105. MC 107.

MC MC

121. 122.

E E

MC MC MC MC MC MC E E P MC MC MC MC MC MC MC MC MC MC MC

123. 124. 125. 126. 127. 132. 134.

E E E E E P P

133.

P

114. 132. 118. 119. 120. 128. 129.

MC P MC MC MC E E

133.

P

130. 135.

E P

108. 109.

MC MC

131.

E

Recommended

View more >