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Questions and Answers
What is the nature of the promise made by the entity to the customer?
What is the nature of the promise made by the entity to the customer?
- To provide the customer with a ticket to fly (correct)
- To offer a discount on future flights
- To provide the customer with a flight
- To ensure the specified flight is available for the customer
Why is the entity considered a principal in the transaction?
Why is the entity considered a principal in the transaction?
- Because it controls the ticket before transferring it to the customer (correct)
- Due to its ability to cancel flights at any time
- Because it sets the sales prices for tickets
- Due to its responsibility for providing the flight itself
What does 'inventory risk' refer to in the context of the entity's operations?
What does 'inventory risk' refer to in the context of the entity's operations?
- The risk of overbooking flights
- The risk of running out of tickets for sale
- The risk of not being able to provide flights on time
- The risk of losing value on unsold tickets (correct)
How does the entity determine whether it controls the ticket before transferring it to the customer?
How does the entity determine whether it controls the ticket before transferring it to the customer?
Why does the entity conclude that it is a principal in the transaction?
Why does the entity conclude that it is a principal in the transaction?
What aspect of providing tickets makes the entity responsible for fulfilling the contract?
What aspect of providing tickets makes the entity responsible for fulfilling the contract?
Why is the entity not responsible for providing the flight itself?
Why is the entity not responsible for providing the flight itself?
'Indian Accounting Standard 115' pertains to which area of accounting?
'Indian Accounting Standard 115' pertains to which area of accounting?
'Company D Ltd.' is mentioned in the text to provide an example related to what?
'Company D Ltd.' is mentioned in the text to provide an example related to what?
What role does 'discretion in setting sales prices' play in determining a company's position as a principal or agent?
What role does 'discretion in setting sales prices' play in determining a company's position as a principal or agent?
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