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cyanantelope77Lv1

11 Dec 2019

Which of the following statements about accrual-basis accounting is not true?

a. It uses the revenue recognition principle.

b. It uses the expense recognition principle

c. It is required for external accounting reports.

d. It requires the timing of cash receipts to be in the same period as revenues are recognized.

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Sixta KovacekLv2

6 Apr 2020

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Related questions

questions:

1. Generally, revenue from sales should be recognized at a pointwhen

Answer

management decides it is appropriate to do so.

the product is available for sale to the ultimate consumer.

the entire amount receivable has been collected from thecustomer and there remains no further warranty liability.

none of these.

2. What is the general approach as to when product costs arerecognized as expenses?

Answer

In the period when the expenses are paid.

In the period when the expenses are incurred.

In the period when the vendor invoice is received.

In the period when the related revenue is recognized.

3. Recognition of expense related to amortization of anintangible asset illustrates which principle of accounting?

Answer

Expense recognition.

Full disclosure.

Revenue recognition.

Historical cost.

4. Which accounting assumption or principle is being violated ifa company is a party to major litigation that it may lose anddecides not to include the information in the financial statementsbecause it may have a negative impact on the company's stockprice?

Answer

Full disclosure.

Going concern.

Historical cost.

Expense recognition.

5. Where is materiality not used in providingfinancial information?

Answer

Applying the revenue recognition principle.

Determining what items to include in the financialstatements.

Applying the going concern assumption.

Determining the level of disclosure.

apricotcrocodile918

Revenue is recognized based on a five-step process that is applied to a company's revenue arrangements.

Requirements: 1. Describe the revenue recognition principle. Briefly describe the five-step process.

2. Explain the importance of contracts when analyzing revenue arrangements.

3. How are fair value measurement concepts applied in implementation of the five-step process?

4. Briefly discuss how the revenue recognition principle relates to the definitions of assets and liabilities.

5. In the previous revenue recognition guidance, revenue is not be recognized unless the revenue was realized or realizable (also referred to as collectibility). Is collectibility a consideration in the recognition of revenue? Explain.

6. Revenue is usually recognized at the point of sale (a point in time). Revenue may be also recognized over time. Give an example of the circumstances in which revenue is recognized over time and accounting merits of its use instead of the point-of-sale basis.