Quiz 5 - 1 Under the realization principle revenue should...

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Unformatted text preview: 1. Under the realization principle, revenue should not be recognized until the earnings process is deemed virtually complete and: Student Response Value Correct Answer Feedback A. Revenue is realized. B. Any receivable is collected. C. Collection is reasonably certain. 100% D. Collection is absolutely assured. Score: 1/1 2. 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. In 2009, Rigsby would recognize realized gross profit of: Score: 1/1 3. Reliable Enterprises sells distressed merchandise on extended credit terms. Collections on these sales are not reasonably assured and bad debt losses cannot be reasonably predicted. It is unlikely that repossessed reasonably assured and bad debt losses cannot be reasonably predicted....
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This note was uploaded on 12/12/2010 for the course ACCT 121A taught by Professor He during the Spring '10 term at San Jose State.

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Quiz 5 - 1 Under the realization principle revenue should...

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