Quiz 06.05 – T/F Customer Control of Goods or Services Transfer
Intermediate Accounting
Spiceland, Nelson, and Thomas
10th Edition
Control over goods or services is attained by the customer when the transfer is completed.
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.
Recognition of revenue should be spread out over time during the construction of an annex to a building owned by the customer, regardless of the seller’s receipt of payment after the annex’s completion.
To measure progress towards completion, a common output method involves determining the percentage of committed goods or services that have been transferred to date.
When should interest revenue be recognized for a loan originated by H&B Bank?
What is the condition that must be met for goods or services to be considered distinct?
How many performance obligations are included in the contract between Ortiz & Co. and EverFresh Bakery?
In transactions where performance obligations are fulfilled over time, allocation of the contract price is unnecessary.