the entire amount receivable has been built up from thecustomer and also there stays no better warranty licapability.

You are watching: Which of the following statements about accrual-basis accounting is not true?

d.

namong these.

2. What is the basic strategy regarding when product expenses areknown as expenses?

Answer

a.

In the duration once the costs are paid.

b.

In the duration as soon as the costs are incurred.

c.

In the duration as soon as the seller invoice is obtained.

d.

In the duration once the connected revenue is known.

3. Recognition of expense pertained to amortization of anintangible ascollection illustrates which principle of accounting?

Answer

a.

Expense recognition.

b.

Full disclocertain.

c.

Revenue recognition.

d.

Historical price.

4. Which accounting presumption or principle is being violated ifa company is a party to major litigation that it might lose anddecides not to include the information in the financial statementsbecause it might have actually a negative influence on the company"s stockprice?

Answer

a.

Full disclosure.

b.

Going problem.

c.

Historical price.

d.

Expense acknowledgment.

5. Wbelow is materiality not used in providingfinancial information?

Answer

a.

Applying the revenue acknowledgment principle.

b.

Determining what items to incorporate in the financialstatements.

c.

Applying the going problem assumption.

d.

Determining the level of disclosure.


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

Requirements: 1. Describe the revenue acknowledgment principle. Briefly define the five-step procedure.

2. Explain the prestige of contracts once analyzing revenue arrangements.

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

4. Briefly talk about just how the revenue acknowledgment principle relates to the meanings of assets and also liabilities.

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

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6. Revenue is typically known at the point of sale (a point in time). Revenue might be likewise recognized over time. Give an instance of the scenarios in which revenue is recognized over time and accountancy merits of its usage instead of the point-of-sale basis.