Chapter 18 Quiz

Chapter 18 Quiz - 1 The revenue recognition principle...

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1.  The revenue recognition principle provides that revenue is recognized when  A) it is realized.  B) it is realizable.  C) it is realized or realizable and it is earned.  D) none of these.  Points Earned:  3.0/3.0  Correct Answer(s): 2. 
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The FASB concluded that if a company sells its product but gives the buyer the right to return the product,  revenue from the sales transaction shall be recognized at the time of sale only if all of six conditions have been  met. Which of the following is not one of these six conditions?  A) The amount of future returns can be reasonably estimated.  B) The seller's price is substantially fixed or determinable at time of sale.  C) The buyer's obligation to the seller would not be changed in the event of theft or damage of the product.  D) The buyer is obligated to pay the seller upon resale of the product.  Points Earned:  3.0/3.0  Correct Answer(s): 3.  One of the more popular input measures used to determine the progress toward completion in the percentage- of-completion method is  A) revenue-percentage basis.  B) cost-percentage basis.  C) progress completion basis.  D) cost-to-cost basis.  Points Earned:  3.0/3.0  Correct Answer(s): 4.  The following information relates to questions 4 and 5. Cooper Construction Company had a contract starting April 2010, to construct a $9,000,000 building that is  expected to be completed in September 2012, at an estimated cost of $8,250,000. At the end of 2010, the costs  to date were $3,795,000 and the estimated total costs to complete had not changed. The progress billings  during 2010 were $1,800,000 and the cash collected during 2010 was 1,200,000. For the year ended December 31, 2010, Cooper would recognize gross profit on the building of:
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This note was uploaded on 03/01/2010 for the course ACCT 30801E taught by Professor Darland during the Spring '10 term at Buena Vista.

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Chapter 18 Quiz - 1 The revenue recognition principle...

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