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Chapter 5 quiz 201 - Chapter 5 Quiz 1. Under the...

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Chapter 5 quiz 201

Intermediate Accounting

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1. Under the realization principle, revenue should not be recognized until the earnings process is deemed virtually complete and: A. Revenue is realized. B. Any receivable is collected. C. Collection is reasonably certain. D. Collection is absolutely assured. 2. Merchandise sold FOB shipping point indicates that: A. The seller pays the freight. B. The buyer holds title after the merchandise leaves the seller's location. C. The common carrier holds title until the merchandise is delivered. D. The sale is not consummated until the merchandise reaches the point to which it is being shipped. 3. Merchandise sold FOB destination indicates that: A. The seller holds title until the merchandise is received at the buyer's location. B. The buyer is responsible for delivery of the merchandise to the destination. C. The full order is back ordered to its destination. D. The buyer pays the freight to the destination. 4. Which of the following was not a criterion for revenue recognition in SAB 101? A. Cash has been collected. B. Collectiblity is reasonably assured. C. Persuasive evidence of an arrangement exists. D. The seller's price to the buyer is fixed or determinable. On December 15, 2009, Rigsby Sales Co. sold a tract of land that cost $3,600,000 for $4,500,000. Rigsby appropriately uses the installment sale method of accounting for this transaction. Terms called for a down payment of $500,000 with the balance in two equal annual installments payable on December 15, 2010, and December 15, 2011. Ignore interest charges. Rigsby has a December 31 year-end. 5. In 2009, Rigsby would recognize realized gross profit of: A. $500,000. B. $ 0. C. $900,000. D. $100,000. 6. In 2010, Rigsby would recognize realized gross profit of:
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