Day 3

Question 1

What is the criteria for contract service related obligations?

Answer 1

1. The buyer is able to benefit from each service independently
2. The promise to deliver each service is separately identified
3. The buyer can benefit from each service when combined with their other resources

MCQ-06243

Question 2

For Bill-and-Hold arrangements when is revenue recognized

Answer 2

1. Substantive reason for the hold
2. Separately identified
3. Currently ready for transfer
4. Entity cannot use or sell to another customer

MCQ-06248

Question 3

How do you calculate Gross Profit earned when revenue is recognized overtime?

Answer 3

1. Calculate the estimated gross Profit of the completed contract
2. Multiply by the % completion to date

MCQ-03986

Question 4

What is the pervasive constraint of FS

Answer 4

Cost Constraint - the benefits of reporting financial information must be greater than the cost of obtaining and presenting the information

Becker Flashcard

Question 5

There elements of Faithful Representation

Answer 5

1. Neutrality
2. Completeness
3. Freedom from Error

Question 6

In an operating lease, how is rent expense recognized

Answer 6

Rent expense is recognized on a Straight Line basis regardless of the actual payment structure

Question 7

How do not for profits report their expenses

Answer 7

1. By nature
2. By function

This can be reported on the face of the Stmt of Activities, as a separate Stmt, or in the notes of the FS