ACC 131 Chapter 5 MC Exam Questions and Answers Already Passed Latest Update 2025-
2026
3 items of Criteria for revenue recognition - Answers 1. delivery has occurred or services have
been provided
2. persuasive evidence of an arrangement exists
3. the seller's price to the buyer is fixed and determinable
Food To Go is a local catering service. Conceptually, when should Food To Go recognize
revenue from its catering service? - Answers at the date the meals are served
When is revenue from the sale of merchandise normally recognized? - Answers when the
customer takes possession of the merchandise
What does the phrase "Revenue is recognized at the point of sale" mean? - Answers revenue is
recorded in the accounting records and reported on the income statement when goods are sold
and delivered to the customer
On August 31, 2013, Montana Corporation signed a 4 year contract to provide services for
Minefield Company at $30,000 per year. Minefield will pay for each year of services on the first
day of each service year, starting with September 1, 2013. Using the accrual basis accounting,
when should Montana recognize revenue? - Answers equally throughout the year as services are
provided
Under the gross method, the seller records discounts taken by the buyer... - Answers in a contra-
revenue account
On April 20, McLean Company provides lawn care services to Tazwell Corporation for $3,000
with terms 1/10, n/30. On April 28, Tazwell pays for half of the services provided, and on May 19
it pays for the other half. What is the total amount of cash McLean received? - Answers $2,985
A sale and its associated receivable are recorded only when... - Answers the order, shipping and
billing documents are all present
Shipping and billing documents are prepared based on... - Answers the order document
Accounting for a sale begins with... - Answers the receipt of a purchase order or similar
document from a customer
3 ways in which receivables are commonly distinguished - Answers 1. trade or nontrade
receivable
2. current or noncurrent
3. accounts or notes receivable
2026
3 items of Criteria for revenue recognition - Answers 1. delivery has occurred or services have
been provided
2. persuasive evidence of an arrangement exists
3. the seller's price to the buyer is fixed and determinable
Food To Go is a local catering service. Conceptually, when should Food To Go recognize
revenue from its catering service? - Answers at the date the meals are served
When is revenue from the sale of merchandise normally recognized? - Answers when the
customer takes possession of the merchandise
What does the phrase "Revenue is recognized at the point of sale" mean? - Answers revenue is
recorded in the accounting records and reported on the income statement when goods are sold
and delivered to the customer
On August 31, 2013, Montana Corporation signed a 4 year contract to provide services for
Minefield Company at $30,000 per year. Minefield will pay for each year of services on the first
day of each service year, starting with September 1, 2013. Using the accrual basis accounting,
when should Montana recognize revenue? - Answers equally throughout the year as services are
provided
Under the gross method, the seller records discounts taken by the buyer... - Answers in a contra-
revenue account
On April 20, McLean Company provides lawn care services to Tazwell Corporation for $3,000
with terms 1/10, n/30. On April 28, Tazwell pays for half of the services provided, and on May 19
it pays for the other half. What is the total amount of cash McLean received? - Answers $2,985
A sale and its associated receivable are recorded only when... - Answers the order, shipping and
billing documents are all present
Shipping and billing documents are prepared based on... - Answers the order document
Accounting for a sale begins with... - Answers the receipt of a purchase order or similar
document from a customer
3 ways in which receivables are commonly distinguished - Answers 1. trade or nontrade
receivable
2. current or noncurrent
3. accounts or notes receivable
