Seatwork Revenue

The revenue recognition principle provides that revenue is recognized when

• it is realized

• it is realizable.

• It is realized or realizable and it is earned

• none of these

When goods or services are exchanged for cash or claims to cash (receivables), revenues are

• earned

• realized

• recognized

• all of these

Which of the following is not an accurate representation concerning revenue recognition?

• Revenue from selling products is recognized at the date of sale, usually interpreted to

  mean the date of delivery to customers.

• Revenue from services rendered is recognized when cash is received or when services

  have been performed.

• Revenue from permitting others to use enterprise assets is recognized as time passes

  or as the assets are used.

• Revenue from disposing of assets other than products is recognized at the date of sale.

A sale should not be recognized as revenue by the seller at the time of sale if

• payment was made by check.

• the selling price is less than the normal selling price.

• the buyer has a right to return the product and the amount of future returns cannot be

  reasonably estimated.

• none of these

Revenue from the sale of goods is recognized when all the following conditions are met, except...

• The amount of revenue can be measured reliably

• The costs incurred or to be incurred can not be estimated reliably

• It is probable that the economic benefits will flow to the company

• Company has transferred to the buyer the significant risks and rewards of ownership of the goods