ACC 300 CHAPTER 6 EXAM QUESTIONS WITH
VERIFIED SOLUTIONS
The concept or principle that states that companies should recognize revenue when goods
or services are transferred to customers for the amount the company expects to be entitled
to receive in exchange for goods and services is referred to as the:
Core revenue recognition principle
Which of the following are key indicators that control of goods or services has been
transferred to the customer?
Customer has an obligation to pay
Customer accepted the risks and rewards of ownership
Customer has legal title to the asset
Customer has physical possession of the asset
Which of the following services are commonly performed over time?
Financial statement audits
Consulting engagements
Lending of money
Revenue related to a company providing cleaning services to a customer for a period of
time should be recognized
over time.
Inflows or other enhancements of assets or settlements of an entity's liabilities from
delivering or producing goods, rendering services, or other activities that constitute its
ongoing major or central operations are
revenues
The core revenue recognition principle stipulates that companies recognize revenue when
goods or services are
transferred to customers
Goods or services that are not distinct are Blank______ and treated as (a) Blank______
performance obligation
combined; single
Which of the following conditions will cause revenue to be recognized over time?
Customer consumes the benefit of the seller's work as it is performed
Seller creates an asset that has no alternative use, and the seller has the right to receive payment
, for progress to date.
Customer controls the asset as it is created
The amount the seller expects to be entitled to receive from the customer in exchange for
providing goods or services is referred to as the
transaction price.
For the purpose of allocating the transaction price to multiple performance obligations, the
stand-alone selling price of a specific good or service may be estimated if it
cannot be observed directly
For a promise to provide a good or service to be accounted for as a separate performance
obligation, the good or service must be
distinct from other goods and services in the contract.
Arthur Inc. provides services to consulting clients. Arthur should recognize the related
revenue when
the related performance obligation is satisfied.
Xavier Inc. is adding two more floors to Tamara Company's existing office building.
Revenue related to this service likely should be recognized
over time.
The [BLANK] price is the amount the seller expects to be entitled to receive from the
customer in exchange for providing goods and services.
transaction
Jones Company receives a prepayment from a customer consistent with a promise to
deliver 20 new office printers to Smith Inc. The prepayment (Select all that apply.)
does not create a separate performance obligation
should be recorded as deferred revenue
Stand alone selling price
is the amount at which the good or service is sold separately under similar circumstance.
Which of the following situations may make the contract price less apparent?
Variable consideration provisions
The time value of money
Payment by the seller to the customer
Sales with right of return
Determining whether the seller is acting as principal or agent
VERIFIED SOLUTIONS
The concept or principle that states that companies should recognize revenue when goods
or services are transferred to customers for the amount the company expects to be entitled
to receive in exchange for goods and services is referred to as the:
Core revenue recognition principle
Which of the following are key indicators that control of goods or services has been
transferred to the customer?
Customer has an obligation to pay
Customer accepted the risks and rewards of ownership
Customer has legal title to the asset
Customer has physical possession of the asset
Which of the following services are commonly performed over time?
Financial statement audits
Consulting engagements
Lending of money
Revenue related to a company providing cleaning services to a customer for a period of
time should be recognized
over time.
Inflows or other enhancements of assets or settlements of an entity's liabilities from
delivering or producing goods, rendering services, or other activities that constitute its
ongoing major or central operations are
revenues
The core revenue recognition principle stipulates that companies recognize revenue when
goods or services are
transferred to customers
Goods or services that are not distinct are Blank______ and treated as (a) Blank______
performance obligation
combined; single
Which of the following conditions will cause revenue to be recognized over time?
Customer consumes the benefit of the seller's work as it is performed
Seller creates an asset that has no alternative use, and the seller has the right to receive payment
, for progress to date.
Customer controls the asset as it is created
The amount the seller expects to be entitled to receive from the customer in exchange for
providing goods or services is referred to as the
transaction price.
For the purpose of allocating the transaction price to multiple performance obligations, the
stand-alone selling price of a specific good or service may be estimated if it
cannot be observed directly
For a promise to provide a good or service to be accounted for as a separate performance
obligation, the good or service must be
distinct from other goods and services in the contract.
Arthur Inc. provides services to consulting clients. Arthur should recognize the related
revenue when
the related performance obligation is satisfied.
Xavier Inc. is adding two more floors to Tamara Company's existing office building.
Revenue related to this service likely should be recognized
over time.
The [BLANK] price is the amount the seller expects to be entitled to receive from the
customer in exchange for providing goods and services.
transaction
Jones Company receives a prepayment from a customer consistent with a promise to
deliver 20 new office printers to Smith Inc. The prepayment (Select all that apply.)
does not create a separate performance obligation
should be recorded as deferred revenue
Stand alone selling price
is the amount at which the good or service is sold separately under similar circumstance.
Which of the following situations may make the contract price less apparent?
Variable consideration provisions
The time value of money
Payment by the seller to the customer
Sales with right of return
Determining whether the seller is acting as principal or agent
