Revenue Recognition

What is the first step in the revenue recognition process under PSAK 72?

• Determine the transaction price.
• Identify the contract with a customer.
• Recognize revenue at the point of sale.
• Allocate the transaction price to performance obligations.

When is revenue recognized under PSAK 72?

• Revenue is recognized when control of a good or service is transferred to the customer.
• Revenue is recognized at the end of the accounting period.
• Revenue is recognized when the customer places an order.
• Revenue is recognized when payment is received.

Which of the following would be considered a performance obligation

• Setting payment terms

• An advertising agreement for a third party

• A promised warranty included in the sale of a product

• Internal product testing done by the seller

How does PSAK 72 require the transaction price to be allocated?

• The transaction price is allocated equally among all performance obligations.
• The transaction price is determined by the total cost of the goods sold.
• The transaction price is allocated based on the highest selling price of any performance obligation.

• The transaction price is allocated based on the relative standalone selling prices of the performance obligations.

What is the purpose of identifying performance obligations in a contract?

• To simplify the financial reporting process

• To ensure each good or service promised is accounted for separately

• To combine all contractual promises into one line item

• To increase the company’s reported revenue

If a contract price is $15,000 and the standalone prices of its components are:

• Product A: $6,000

• Service B: $3,000

• Warranty C: $1,000

What is the allocated transaction price for Service B using the standalone price method?

• $4,500

• $3,000

• $3,750

• $2,700

Which of the following is true about variable consideration under PSAK 72?

• Variable consideration can never be included in the transaction price.
• Variable consideration is always fixed and does not require estimation.
• Variable consideration is only applicable to cash transactions.
• Variable consideration must be estimated using the expected value or most likely amount

What is the key criteria for a contract to be valid under PSAK 72?

• The contract must be signed by a notary public.
• The contract must be in writing and notarized.
• The contract must involve more than $10,000.

• The contract must create enforceable rights and obligations.

What is the primary focus of PSAK 72?

• Revenue generation from investments.
• Cost allocation for production expenses.
• Financial reporting standards for non-profits.
• Revenue recognition from contracts with customers.

A company sells a machine for $20,000, which includes free installation and a 1-year maintenance service. The standalone prices are as follows:

• Machine: $18,000

• Installation: $1,000

• Maintenance: $2,000

What is the allocated transaction price for the maintenance service using the standalone selling price method?

• $1,818

• $1,798

• $2,198

• $1,688