A security contract entered into for a period of 3 years was revoked because of an impled flaw in the contract. The court ruled that the total contract price had to be paid The contract price received by the recipient should be treated as AI 1 Capital because it was received in a lump sum 8 11 Assessable income because it was an amount received to replace loss of earnings CI 1 A windtall gain becauso the company was not expecting the payment D I 1 An exempt income because no services were provided

A security contract entered into for a period of 3 years was revoked because of an impled flaw in the contract. The court ruled that the total contract price had to be paid The contract price received by the recipient should be treated as AI 1 Capital because it was received in a lump sum 8 11 Assessable income because it was an amount received to replace loss of earnings CI 1 A windtall gain becauso the company was not expecting the payment D I 1 An exempt income because no services were provided

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter4: Balance Sheet: Presenting And Analyzing Resources And Financing

Section: Chapter Questions

Problem 9Q

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Define the following: Condition Civil loss Reciprocal obligations Pure obligation Potestative condition Problems Explain or state briefly the rule or reason for your answer. 1. D (debtor) borrowed P20,000 from C (creditor) payable on or before August 30. Before the arrival of the due date, C agreed to the promise of B to pay C if B wants. Can C insist that B pay not later than August 30? 2. Suppose in the same problem, D obliges himself to pay C P10,000 after C has paid his obligation to T. Is the obligation valid? 3. S (seller) agreed to sell to B (buyer) a specific car for P200,000, delivery of the car and the payment of the price to be made on June 15. Suppose S delivered the car on June 15 but B failed to pay the price, what are the remedies of S? 4. S sold a parcel of land to B for P240,000 payable in installments of P20,000 a year. The land was delivered to B who obtained ownership thereof. After B had paid P200,000, he could no longer continuing paying in view of…
2. Which is a valid statement regarding recognition of liabilities? * a. A non-interest bearing note is initially recognized at face value. b. A provision should not be O recognized for future operating losses. c. For accumulating compensated absences, an entity should recognize the expense and related liability during the period the absences are incurred by the employees. d. The estimated future costs of supplying awards for customer loyalty program shall be recognized as an expense in the period the award credits are availed of by customers.
V5. As FASB codification 420-10-25-12 stays “A liability for costs to terminate a contract before the end of its term shall be recognized when the entity terminates the contract in accordance with the contract terms (for example, when the entity gives written notice to the counterparty within the notification period specified by the contract or has otherwise negotiated a termination with the counterparty).” penalty for terminating early Is just a liability? Please explain. Argue about this statement
S1: PFRS 17 allows and insurer to change its accounting policies for insurance contract only if, as a result of its financial statements present information that is more relevant. $2: Outward Reinsurance is where the premium and commission shall be accounted for in the different accounting period original policy to which the reinsurance relates. $3: Premium deficiency arises when the unearned premium reserve is less than the estimated claims related expenses. O Only S1 is incorrect O Only S2 is incorrect O Only S1 is correct O Only S3 is correct All statements are correct O Only S3 is incorrect Only S2 is correct All statements are incorrect
T/F 1. It is reserved at the moment of the perfection of the contract for if the right to repurchase is agreed upon afterwards, there is only a promise to sell which produces different rights and effect and is governed by Article 1616. 2.If there is an agreement as to the period of redemption, the period agreed upon cannot exceed six (6) years. 3.If the thing which is the object of the contract has been partially lost, the contract shall be without any effect. The reason is because there is an absence of an essential element, that is, the object. 4.It is a potestative condition because when exercised, the right of ownership acquired by the vendee is extinguished. 5. The essence of a pacto de retro sale is that title and ownership of the property sold is immediately vested in the vendee a retro, subject to the resolutory condition of repurchase by the vendor a retro within the redemption period. 6.Article 1493 states that "Where the parties purport a sale of specific goods, and the…
33. Entity A enter into a long-term contract to provide service. The outcome of the transaction can be estimated reliably and the progress on the contract can be measured with sufficient reliability. According to PPSAS, how should entity A recognize revenue from the contract? On a straight-line basis over the contract term By reference to the stage of completion of the contract at the reporting date Full recognition of contract price upon completion of the contract Only to the extent of costs that are expected to be recovered.
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S1: PFRS 17 allows and insurer to change its accounting policies for insurance contract only if, as a result of its financial statements present information that is more relevant. S2: Outward Reinsurance is where the premium and commission shall be accounted for in the different accounting period original policy to which the reinsurance relates. $3: Premium deficiency arises when the unearned premium reserve is less than the estimated claims related expenses. Only S3 is correct O All statements are correct Only S1 is correct Only S1 is incorrect Only S2 is correct Only S3 is incorrect All statements are incorrect Only S2 is incorrect
Which of the following statements regarding the recognition of expenses related to long-term contracts under IFRS is true? A: General and administrative expenses are normally recognized as an asset. B: The cost of wasted resources of an abnormally high amount are recognized as an asset until the performance obligation has been met. C: If capitalized costs are no longer expected to be recovered through the contract, a portion of contract revenue should be reversed. D: Costs that will be reimbursed by the customer are recognized as an asset.
K GAAP requires companies to method to record bad debts expense. OA. use the allowance OB. use the fair value OC. select either the direct write-off or allowance O D. use the direct write - off
40. When an entity breaches an undertaking under a long-term loan agreement on or before the balance sheet date with the effect that the liability becomes payable on demand, (choose the incorrect statement) a. The liability is classified as non-current, even if the lender has agreed, after the balance sheet date and before the authorization of the financial statements for issue, not to demand payment as a consequence of the breach b. The liability is classified as current because, at the balance sheet date, the entity does not have an unconditional right to defer its settlement for at least twelve months after that date. c. The liability is normally classified as current; however, the liability is classified as non-current if the lender agreed by the balance sheet date to provide a period of grace ending at least twelve months after the balance sheet date, within which the entity can rectify the breach and during which the lender cannot demand immediate repayment. d. The…
15 When it is probable that total contract costs will exceed total contract revenue, how shall the long-term contractor account for the difference? Group of answer choices a. The expected profit shall be recognized as a profit immediately. b. The expected loss shall be recognized as an expense taking into account the percentage of completion as of the end of the period. c. The expected loss shall be recognized as a profit taking into account the percentage of completion as of the end of the period. d. The expected loss shall be recognized as an expense immediately.