Which of the following statements is not true regarding revenue recognition regarding gift cards? A. "Breakage" refers to the unused portion of gift card balances B. "Breakage" can only be recognized as revenue to the extent that it is probable a reversal will not be necessary. C. It is typical that a portion of gift card sales will go unused by customers.
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Which of the following statements is not true regarding revenue recognition regarding gift cards?
A. "Breakage" refers to the unused portion of gift card balances
B. "Breakage" can only be recognized as revenue to the extent that it is probable a reversal will not be necessary.
C. It is typical that a portion of gift card sales will go unused by customers.
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- what basic accounting principle is the basis for criticizing the direct charge off method for recording uncollectible accounts?Which of the following accounts is not a contra-revenue? Group of answer choices A)Sales discounts B)Credit card discounts C)Sales returns and allowances D)Allowance for doubtful accounts E)All the above are contra-revenuesThe Sales Discounts Forfeited account ________. A. is a balance sheet account B. represents additional sales revenue C. represents additional revenue due to the customer not paying within the discount period D. is a contra Sales Revenue account
- Disregarding the special circumstances when bases other than the point of sale are used, discuss the advantages of each of the following objections to the point-of-sale basis of revenue recognition: (i) It is too conservative because revenue is earned throughout the entire process of production. (ii) It is not conservative enough because accounts receivable do not represent disposable funds, sales returns and allowances may be made, and collection and bad debt expenses may be incurred in a later periodIn accounting for revenue recognition under ASC Topic 606, revenue can be recognized before a contract exists when cash has been received and: Goods have already been delivered to a customer, and there is no further obligation for the seller to deliver goods or services. The cash has been received for goods identified to be delivered and the cash is refundable. The cash has been received for goods or services to be delivered and the cash is nonrefundable. Revenue should never be recognized before a contract exists.Which is not correct? The sale of VAT registrable persons are not subject to VAT and input VAT is also not allowed. The sale of VAT registrable persons are subject to output VAT and input VAT is allowed. The sale of non-VAT registered person who issued VAT receipts or invoices are allowed to credit input VAT. All of the above
- Which of the following is not true about the Allowance for Doubtful Accounts? Multiple Choice It is a contra asset account. It is used instead of reducing accounts receivable directly. It is debited when uncollectible accounts are written off. It is a liability account. It is credited when bad debts is estimated and recorded.Which of the following would not result in a reduction of the amount invoiced to a customer when a credit sale is made? A. Quantity discount B. Cash-free discount C. Sales discountD. Two-for-one specialWhich of the following errors will be detected by a trial balance? a. Posting a credit to Sales instead of the Accounts Payable b. Incorrecty computing the balance of the cash account c. Not journalizing a complete sales transaction d. Forgetting to post a complete purchase transaction
- The table below shows the financial process with corresponding significant account and relevant assertions. Each financial process shows what could go wrong (WCGW). Identify the relevant control to address each WCGW. Answers should be in not less than three sentences. Significant account and Relevant control to Financial Process What Could Go Wrong relevant assertion(s) address WCGW Purchase order is inappropriate because: the purchase order does not match a valid requisition; Purchases Trade accounts payable (EA) purchase is at incorrect price; or an inappropriate or authorized vendor is selected. Plant, equipment and leasehold Errors are made in the capitalization of fixed assets because: Property, plant and improvement, net (EAO) inappropriate items are capitalized; items are capitalized at equipment Land and Building, net (EAO) an inappropriate amount; or additions are not recorded. Answer with text and/or attachments:TB 03-62 Under IFRS, the following is not part of the... Under IFRS, the following is not part of the revenue recognition principle: Multiple Choice the transaction price is determinable when control to the goods and services has not been transferred to the customer promised goods or services have been transferred. the obligated performance is satisfiedBias in revenue recognition would least likely be suspected if:A . the fi rm engages in barter transactions.B . reported revenue is higher than the previous quarter.C . revenue is recognized before goods are shipped to customers.