Under PFRS 15, when shall a franchisor recognizes revenue from its contingent franchise fee, also known as sales-based royalty revenue? Group of answer choices When the franchisor satisfies the performance obligation in relation to the initial franchise fee based on the accounting estimate using historical evidence When the sales of the franchisee occur When the franchisee signs the document evidencing the franchise agreement When the franchisor collected the nonrefundable upfront fee

Under PFRS 15, when shall a franchisor recognizes revenue from its contingent franchise fee, also known as sales-based royalty revenue? Group of answer choices When the franchisor satisfies the performance obligation in relation to the initial franchise fee based on the accounting estimate using historical evidence When the sales of the franchisee occur When the franchisee signs the document evidencing the franchise agreement When the franchisor collected the nonrefundable upfront fee

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 1C: Prior to ASU 2014-09 changing the principles underlying revenue recognition, companies recognized...

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1. Under PFRS 15, how shall revenue from contracts with customers such as revenue from initial franchise fee be recognized by the franchisor? a. Upon receipt of the initial franchise fee by the franchisor. b. Upon signing of the franchise agreement. c. When the franchisor satisfies the performance obligation under the franchise agreement. d. Applying the legality over the substance of the transaction. DED g 15
[S1] Under the current PPRS, a franchisor recognizes the initial franchise fee as revenue in full at the commencement of the franchisee's business operation if the fee is for initial services to prepare the franchisee for business. [S2] A right to access is determined as a performance obligation when the franchisor's intellectual property is expected to change over the contract period. [A] Only S1 is true, [B] Only S2 is true. [C] Both are true. [D] Both are false. ABC obtained 2 fire insurances for his commercial building. During the year, the commercial building was burned. What legal principle prohibits ABC from relaxing and just watch the commercial building burn? [A] proximate cause [B] loss minimization [C] Contribution [D] Indemnity [S1] Where there is, double insurance, the insurers are to divide the loss ratably or in the ration each policy bears to the total insurance carried. [S2] When property is insured with different insurers against the same risk and total insurance…
Under PFRS 15, what is the measurement basis of revenue from contracts with customers? Select the correct letter: A. Revocable amount of the consideration received or receivable B. Book value of the consideration received or receivable C. Fair value of the consideration received or receivable D. Historical cost of the consideration received or receivable
7 What will a contingency note contain? Review Later A circumstance where a company may have a liability A disclosure of future contracts to be performed A disclosure of all future commitments of the company A set of criteria required to be able to recognize revenue
Under - PFRS 15, when shall entity recognize revenue from contract with customers? Select the correct response: When or as the entity satisfies a performance obligation. When the entity becomes a party to a contract. When it is probable that future economic benefits will flow to the entity and the fair value of the revenue can be measured reliably. When the entity has already collected the reconsideration from revenue from contract with customers.
15 When it is probable that total contract costs will exceed total contract revenue, how shall the long-term contractor account for the difference? Group of answer choices a. The expected profit shall be recognized as a profit immediately. b. The expected loss shall be recognized as an expense taking into account the percentage of completion as of the end of the period. c. The expected loss shall be recognized as a profit taking into account the percentage of completion as of the end of the period. d. The expected loss shall be recognized as an expense immediately.
Required A 1. Record the sales agreement. 10.01.2020 2.Record entry for forward contract entered into by Mertag Company. 10.01.2020 3. Record the forward contract and recognize the change in fair value. 12.31.2020 4. Record the firm commitment and recognize the change in fair value. 12.31.2020 5. Record the entry to adjust the fair value of the forward contract. 01.31.2021 6. Record the entry to adjust the fair value of the firm commitment. 01.31.2021 7. Record the sale and receipt of PLN. 01.31.2021 8. Record settlement of forward contract. 01.31.2021 9.Record entry to close the firm commitment. 01.31.2021 Required B Determine the net benefit, if any, realized by Mertag from entering into the forward contract. (Do not round intermediate calculations. Negative amount should be entered with a minus sign.) Net benefit:
33. Entity A enter into a long-term contract to provide service. The outcome of the transaction can be estimated reliably and the progress on the contract can be measured with sufficient reliability. According to PPSAS, how should entity A recognize revenue from the contract? On a straight-line basis over the contract term By reference to the stage of completion of the contract at the reporting date Full recognition of contract price upon completion of the contract Only to the extent of costs that are expected to be recovered.
What is Revenue Recognition Companies should recognize revenue in the accounting period in which a contract is finalized Companies should recognize revenue in the accounting period in which services are performed. O Companies should ecognize revenue when the customer pays its bill
Under PFRS 15, when shall a consignor recognize revenue from its consignment sales? When it is probable that future economic benefits will flow to the consignor and the fair value of the revenue can be measured reliably. When the consignor receives cash remittance from the consignee. When the consignor satisfies its performance obligation under consignment contract. When the consignor enters into a consignment contract with a consignee.
1 Under IFRS 15, an entity recognizes revenue from contract with customers when or as the entity satisfies the performance obligation. Any of the following criteria is considered satisfaction by an entity of performance obligation over time, except Group of answer choices a. The entity has already transferred the control, title, and risk/rewards of ownership of the asset to the customers upon delivery of the asset b. The customer simultaneously receives and consumes all of the benefits provided by the entity as the entity performs c. The entity’s performance creates or enhances an asset that the customer controls as the asset is created. d. The entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date.
If a company sells a product, and gives the buyer the right to return the product within a specified period, revenue from the sales transaction should be recognized at the time of sale if: Question 21 options: there is a transfer of the risks and rewards of ownership. the market for returnable goods is unknown. the amount of future returns can be reasonably estimated. the amount of goods returned is likely to be high. At the time of a contract signing, Question 16 options: no journal entry is recorded. cash is recorded. a contract liability is recorded. a contract asset is recorded.