Contract Revenue Recognition Quiz

The amount of revenue recognized is based on the percentage of work completed, regardless of payments received.

The company recognizes revenue according to the percentage of work completed, even if all payments haven't been received.

A non-refundable upfront fee received for services to be provided in the future.

The fee is recognized as a liability because the service hasn't been provided yet.

Revenue recognition is delayed until the goods are delivered, despite the customer having the option to return them.

Revenue recognition is delayed until the customer has accepted the goods. If a return is likely, revenue is recognized only for the amount expected to be retained.

UJ is the agent because it facilitates transactions for the sellers without taking ownership of the goods. It is the sellers who bear the inventory risk and are responsible for delivery.

UJ's revenue comes from commissions earned on sales facilitated through the website.

When a customer pays upfront for goods that haven't been delivered, it creates a contract liability for the seller. This liability is reduced when the goods are delivered.

When a customer pays for goods before delivery, the seller recognizes a contract liability. The seller is obligated to fulfill the delivery, and the liability is released when the goods are delivered.

The customer controls the asset as it's created or enhanced.

When goods are delivered after payment is received, the seller recognizes a contract liability initially. Upon delivery, the liability is recognized as revenue.

The standard warranty is considered a separate performance obligation from the sale of the boiler, while the additional warranty is recognized under IFRS 15.

HS should recognize revenue based on the percentage of work completed, as determined by the value of work completed.

In a contract with multiple performance obligations, revenue is allocated based on the standalone selling prices of each obligation.

RL recognizes revenue for the coats sold, but also accounts for a refund liability based on the expected return rate.

OM recognizes the warranty and training services as separate performance obligations.

When a seller delivers goods and the customer pays later, revenue is recognized when the goods are transferred, regardless of when the payment is received.

AB only recognizes revenue for the portion of the fee it retains. The remaining portion is paid directly to the holiday company.

The present value of the future payments is calculated using the appropriate discount rate to determine the revenue recognized in the current period.

The estimated transaction price is determined by considering the probability of completion by the deadline and the potential price adjustments.

When the completion date and future costs are uncertain, revenue is recognized only to the extent of costs incurred.

Units delivered to the customer, units produced, labour hours expended, machine hours used, progress billings, or surveys of performance.

The transaction price is determined by considering the probability of completing the project within the deadline and the potential bonus.