BUS 321 – 60+ Solved Questions 2025/2026 – Revenue Recognition, Journal Entries, Performance Obligations, Variable Consideration & Principal-Agent Classification

This exam preparation guide for BUS 321 provides 60+ solved questions and journal entry examples covering essential topics in revenue recognition accounting, based on the 2025/2026 curriculum. Designed for accounting, business, and finance students, it systematically walks through the five-step revenue recognition model, using real-world-style scenarios, numerical applications, and conceptual MCQs. Key areas of focus include: The 5-step revenue recognition process: identifying contracts, performance obligations, transaction price determination, allocation, and recognition Journal entries for deferred and recognized revenue, accounts receivable, and subscription-based income Criteria for control transfer: legal title, payment obligation, possession, risk assumption Single vs. multiple performance obligations: how and when to recognize revenue in bundled contracts Right of return & refund liability: how returns impact net sales revenue Variable consideration: use of expected value vs. most likely amount for revenue estimation Principal vs. agent roles: recognition differences and commission-based revenue Real-life examples: Tri-Box and Tri-Net transactions, subscriptions, discounts, and warranty scenarios Revenue recognition timing complexities: gift cards, franchises, bill-and-hold, and consignment agreements This resource is structured for clarity and aligned with GAAP and ASC 606 standards, making it a reliable tool for midterm, final, or CPA exam preparation. Suitable for students in: Undergraduate accounting and finance programs Business majors taking intermediate accounting or revenue courses MBA programs with financial reporting components CPA candidates preparing for FAR section Online and in-person university courses covering ASC 606 All answers are concise, exam-focused, and built to enhance conceptual understanding and test performance. Keywords: revenue recognition, ASC 606, performance obligations, transaction price, journal entries, deferred revenue, accounts receivable, right of return, variable consideration, principal vs agent, expected value, most likely amount, control transfer, contract identification, standalone selling price, refund liability, consignment, bill and hold, gift card revenue, warranty discount, revenue allocation, GAAP, financial reporting