ACCT 311, ch 4-6, fall04

ACCT 311, ch 4-6, fall04 - Accounting 311 Test: Chapters 4...

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Accounting 311 Test: Chapters 4 - 6 Fall 2004 A. Smith Name___________________________________ Multiple Choice. Write the letter of the best answer. 3 points each. ____ 1. For a typical manufacturing company, the most common critical point for recognizing revenue is the date: a) An order is received. b) Production is completed. c) The product is delivered. d) Payment is received. ____ 2. The percentage-of-completion method violates the general rule on revenue recognition that the earnings process is complete: a) in order to provide timely information to the readers of the financial statements. b) because following this rule is rarely relevant to the proper recognition of revenue. c) since the difference between recording earnings when the contract is complete and when it is only partially complete is always immaterial. d) because collections have been received. ____ 3. K.D. Nickles Department Store sells furniture using an extended payment plan, with terms of 10% down and the balance paid with 24 monthly payments with interest at 12% on the unpaid balance. Losses on sales cannot be satisfactorily estimated and are probable. The revenue recognition method Nickles should use is the: a) Installment sales method. b) Point of product delivery method. c) Cost recovery method. d)
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This note was uploaded on 03/14/2010 for the course ACC 311 taught by Professor Smith during the Spring '10 term at Malone University.

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ACCT 311, ch 4-6, fall04 - Accounting 311 Test: Chapters 4...

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