B can direct use of the product ﻝﻭﺩ

B. Can direct use of the product.

ﻝﻭﺩ ﻥﻳﺗﺎﻧﻘﻟﺍ ﻰﻠﻋ ﺎﻫﻭﻗﻼﺗﺣ ﺎﻫﻭﺟﺎﺗﺣﺗ ﻲﻠﻟﺍ ﻪﻠﺋﺳﻻﺍﻭ ﺏﺗﻛﻟﺍ ﻝﻛ
C. Has physical possession of the asset.
D. Pays for the asset in full.
Question: 13
A promised asset is transferred in full satisfaction of a performance obligation in a contract when
the customer
A. Obtains control of the asset.
Answer (A) is correct .
Revenue is recognized when a performance obligation is satisfied by transferring a promised good or
service to a customer. It happens when the customer obtains control of the good or service (i.e., an
asset). Control of an asset is transferred to the customer when the customer (1) has the ability to direct
the use of the asset and (2) obtains substantially all of the remaining benefits (potential cash flows)
from the asset.
B. Can direct use of the product.
C. Has physical possession of the asset.
D. Pays for the asset in full.
Question: 14
A hotel enters into a contract with a customer to provide 10 rooms for 10 nights for $200 per room
per night. In addition to the room price per night, the hotel collects a city occupancy tax of $7 per room per night.
According to the hotel’s promotion, each customer that purchases in total more than 50 room nights is entitled to a
credit of $3,000 on the entire purchase. What is the total transaction price of the contract?
A. $20,000
B. $17,700
C. $17,000
Answer (C) is correct .
The transaction price is the amount of consideration to which an entity expects to be entitled in
exchange for transferring promised goods or services to a customer. It excludes amounts collected on
behalf of third parties. Thus, the amount collected for city occupancy taxes must not be included in the
transaction price. In addition, any consideration payable to the customer, such as coupons, credit, or
vouchers, reduces the transaction price. Accordingly, the total transaction price of the contract is
$17,000 [(10 × 10 × $200) – $3,000].
D. $20,700
Question: 15
On January 1, Year 1, an entity sold a product to a customer for $64,751 payable 36 months after
delivery. The customer obtains control of the product at contract inception. The cash selling price of the product is
$50,000. This price is the amount that the customer would pay upon delivery at contract inception assuming the

ﻝﻭﺩ ﻥﻳﺗﺎﻧﻘﻟﺍ ﻰﻠﻋ ﺎﻫﻭﻗﻼﺗﺣ ﺎﻫﻭﺟﺎﺗﺣﺗ ﻲﻠﻟﺍ ﻪﻠﺋﺳﻻﺍﻭ ﺏﺗﻛﻟﺍ ﻝﻛ
same product is sold under otherwise identical terms and conditions. The contract includes an implicit interest rate
of 9%. What amounts of revenue and interest income from this contract, if any, were recognized by the entity in
Year 1?
Revenue from
Customers Interest Income
A. $64,751 $0
B. $50,000 $4,500
Answer (B) is correct .
The revenue recognized must reflect the price that a customer would have paid for the promised goods
or services if the cash payment had been made when the goods were transferred to the customer (the
cash selling price). Thus, $50,000 of revenue from the customer must be recognized on 1/1/Year 1.