#1
Which accounting standard governs revenue recognition?
ASC 606
ExplanationASC 606 governs revenue recognition.
#2
When can revenue be recognized under the accrual basis of accounting?
When goods or services are delivered
ExplanationRevenue is recognized when goods or services are delivered.
#3
Which of the following is NOT a core principle of revenue recognition according to ASC 606?
Recognize revenue when cash is received
ExplanationRecognizing revenue when cash is received is NOT a core principle of ASC 606.
#4
Under ASC 606, how should variable consideration be estimated?
Using the expected value method
ExplanationVariable consideration should be estimated using the expected value method under ASC 606.
#5
Which revenue recognition method recognizes revenue as performance obligations are satisfied?
Percentage of completion method
ExplanationThe percentage of completion method recognizes revenue as performance obligations are satisfied.
#6
What is the primary criterion to recognize revenue under IFRS 15?
When the performance obligations are satisfied
ExplanationRecognizing revenue under IFRS 15 is based on when the performance obligations are satisfied.
#7
Which of the following is an example of a performance obligation under ASC 606?
Delivering a product manual
ExplanationDelivering a product manual is an example of a performance obligation under ASC 606.
#8
Which of the following is NOT a step in the revenue recognition process under ASC 606?
Recognize revenue when cash is received
ExplanationRecognizing revenue when cash is received is NOT a step in the revenue recognition process under ASC 606.
#9
Under IFRS 15, what is the term used for the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer?
Transaction price
ExplanationThe term used for the amount of consideration under IFRS 15 is Transaction price.
#10
Which of the following statements is true regarding revenue recognition for long-term construction contracts?
Revenue should be recognized based on the percentage of completion
ExplanationRevenue for long-term construction contracts should be recognized based on the percentage of completion.