C4: REVENUE RECOGNITION

Question 1

Inflows from cash and accounts receivable, such as sale of goods and provision of services are an example of:

Answer 1

Revenue

Question 2

Two types of Revenue Recognition:

Answer 2

1. IFRS (Contract-based)
2. ASPE (Earnings-based)

Question 3

What is a contract based revenue recognition?

Answer 3

IFRS

Question 4

Revenue is recognized whenever a company’s net position ____________.

Answer 4

Increases

Question 5

T/F: If performance obligations decrease, then we cannot recognize revenue.

Answer 5

False

Question 6

Companies must fulfill ____________________ to increase net position.

Answer 6

Performance Obligations

Question 7

Is assurance warranty a performance obligation?

Answer 7

No

Question 8

Companies estimate expected returns and also allocate a portion of the transaction price to service warranties to avoid:

Answer 8

Revenue Recognition Issues