1
ACC 212 Exam 3 Questions with Correct Answers |
Updated (100% Correct Answers)
T or F: A company's income statement might use "sales revenue" or "service
revenue" to describe the transfer of goods or services to customers. Answer:
True
T or F: Sales revenue is often the smallest amount depicted in a company's
income statement. Answer: False
T or F: Riley's Produce Stand only accepts cash or Venmo as payment. It does not
extend credit to customers. Therefore, Riley's Produce Stand will not report bad
debt expense on its income statement. Answer: True
T or F: There is no relationship between revenue recognition and a seller's
promise to deliver goods and services to customers. Answer: False
T or F: Although credit card transactions are subject to a processing fee, many
sellers accept credit cards because they offer a convenient way to promptly
collect payment from customers. Answer: True
In the sales process, an enterprise provides goods and services to ______ in
exchange for ________. Answer: customers, cash
________________ revenue is a current liability that arises when an enterprise
receives cash from customers before providing promised goods or services.
Answer: deferred/unearned
© 2026 All rights reserved
, 2
What does a customer ultimately transfer to a seller as part of the sales process?
Answer: Inventory
What might be an initial element of the sales process? Answer: A customer
inquiry
What income statement subtotal is equal to net sales minus cost of goods sold?
Answer: Gross profit
What balance sheet asset might informally be noted as "A/R"? Answer: Accounts
Receivable
What term does the FASB use to describe a seller's promise to deliver goods or
services to customers? Answer: Performance obligations
During which step of the FASB's revenue recognition process will an enterprise
recognize revenue? Answer: Step 5
Griffin's Game Gear manufactures pickleball racquets. The company sells racquets
directly to customers for a selling price of $30. Customers can optionally
purchase a two-year extended warranty for $10. If a customer purchases both a
racquet and the extended warranty, how many performance obligations exist?
Answer: Two
Messing Pavement Professionals (Messing) recently signed a contract to repave
Campus Drive that runs through GVSU's Allendale campus. The base contract
price is $3,000,000. Messing could earn a $10,000-per-day bonus if it completes
the job ahead of schedule. Depending upon facts, circumstances, and Messing's
managerial judgments, which of the following amounts could be the transaction
© 2026 All rights reserved
ACC 212 Exam 3 Questions with Correct Answers |
Updated (100% Correct Answers)
T or F: A company's income statement might use "sales revenue" or "service
revenue" to describe the transfer of goods or services to customers. Answer:
True
T or F: Sales revenue is often the smallest amount depicted in a company's
income statement. Answer: False
T or F: Riley's Produce Stand only accepts cash or Venmo as payment. It does not
extend credit to customers. Therefore, Riley's Produce Stand will not report bad
debt expense on its income statement. Answer: True
T or F: There is no relationship between revenue recognition and a seller's
promise to deliver goods and services to customers. Answer: False
T or F: Although credit card transactions are subject to a processing fee, many
sellers accept credit cards because they offer a convenient way to promptly
collect payment from customers. Answer: True
In the sales process, an enterprise provides goods and services to ______ in
exchange for ________. Answer: customers, cash
________________ revenue is a current liability that arises when an enterprise
receives cash from customers before providing promised goods or services.
Answer: deferred/unearned
© 2026 All rights reserved
, 2
What does a customer ultimately transfer to a seller as part of the sales process?
Answer: Inventory
What might be an initial element of the sales process? Answer: A customer
inquiry
What income statement subtotal is equal to net sales minus cost of goods sold?
Answer: Gross profit
What balance sheet asset might informally be noted as "A/R"? Answer: Accounts
Receivable
What term does the FASB use to describe a seller's promise to deliver goods or
services to customers? Answer: Performance obligations
During which step of the FASB's revenue recognition process will an enterprise
recognize revenue? Answer: Step 5
Griffin's Game Gear manufactures pickleball racquets. The company sells racquets
directly to customers for a selling price of $30. Customers can optionally
purchase a two-year extended warranty for $10. If a customer purchases both a
racquet and the extended warranty, how many performance obligations exist?
Answer: Two
Messing Pavement Professionals (Messing) recently signed a contract to repave
Campus Drive that runs through GVSU's Allendale campus. The base contract
price is $3,000,000. Messing could earn a $10,000-per-day bonus if it completes
the job ahead of schedule. Depending upon facts, circumstances, and Messing's
managerial judgments, which of the following amounts could be the transaction
© 2026 All rights reserved
