INTERMEDIATE ACCOUNTING EXAM
REVIEW QUESTIONS AND ANSWERS
Which of the following is not a step used to apply the core principle of revenue
recognition?
a.) determine the transaction price
b.) identify the performance obligations in the contract
c.) identify the contract with a customer
d.) ensure the sales price is fixed and determinable - Answer-d.) ensure the sales price
is fixed and determinable
The five steps used to apply the core principle of revenue recognition are: - Answer-1.
identify the contract with a customer
2. identify the performance obligation in the contract
3. determine the transaction price
4. allocate the transaction price to each performance obligation
5. recognize revenue when each performance obligation is satisfied
Which of the following is not an indicator that control of a good has passed from the
seller to the buyer?
a. buyer has legal title
b. buyer has an unconditional obligation to pay
c. buyer has scheduled delivery
d. buyer has assumed the risk and rewards of ownership - Answer-c. buyer has
scheduled delivery
Amounts readily
available to pay off debt
or to use in operations - Answer-Cash
Short-term, highly liquid
investments, readily
convertible to cash with little
risk of loss - Answer-cash equivalents
Have a maturity date no
longer than three months
from the date of purchase - Answer-cash equivalents
internal control exists to: - Answer-*encourage adherence to company policies and
procedures
*promote operational efficiency
*minimize errors and theft
*enhance the reliability and accuracy of accounting date
REVIEW QUESTIONS AND ANSWERS
Which of the following is not a step used to apply the core principle of revenue
recognition?
a.) determine the transaction price
b.) identify the performance obligations in the contract
c.) identify the contract with a customer
d.) ensure the sales price is fixed and determinable - Answer-d.) ensure the sales price
is fixed and determinable
The five steps used to apply the core principle of revenue recognition are: - Answer-1.
identify the contract with a customer
2. identify the performance obligation in the contract
3. determine the transaction price
4. allocate the transaction price to each performance obligation
5. recognize revenue when each performance obligation is satisfied
Which of the following is not an indicator that control of a good has passed from the
seller to the buyer?
a. buyer has legal title
b. buyer has an unconditional obligation to pay
c. buyer has scheduled delivery
d. buyer has assumed the risk and rewards of ownership - Answer-c. buyer has
scheduled delivery
Amounts readily
available to pay off debt
or to use in operations - Answer-Cash
Short-term, highly liquid
investments, readily
convertible to cash with little
risk of loss - Answer-cash equivalents
Have a maturity date no
longer than three months
from the date of purchase - Answer-cash equivalents
internal control exists to: - Answer-*encourage adherence to company policies and
procedures
*promote operational efficiency
*minimize errors and theft
*enhance the reliability and accuracy of accounting date
