Quiz – Which is Separate Performance Obligation
Intermediate Accounting
Spiceland, Nelson, and Thomas
10th Edition
Which is considered performance obligation?
Which is considered performance obligation?
Find the variable costing unit product cost for the month.
Your numbers will vary.
When goods or services are provided to customers, companies acknowledge revenue for the amount they anticipate receiving in exchange for them.
In accounting, companies recognize revenue upon transferring goods or services to customers and are recorded at the expected amount of consideration to be received.
One of the five steps involved in applying the core revenue recognition principle is to assess the probability of the seller collecting the entitled consideration.
To provide clarity on revenue recognition guidelines, the FASB released Staff Accounting Bulletin No. 101.
Control over goods or services is attained by the customer when the transfer is completed.
Recognition of revenue is always done upon the buyer obtaining physical possession of goods.
For a long-term contract where the seller is receiving periodic payments for progress to date, and where refunds may be required in the event of contract cancellation, revenue should be recognized over time.
A prevalent approach to gauge progress toward completion is to compare the cost incurred thus far with the projected total cost to finish the task.