30 Questions
Who undertakes the responsibility to deliver the food item?
Zigato
What is the primary responsibility of the restaurant?
Preparing the food and ensuring its quality
Why is Zigato considered an agent in this scenario?
It delivers the food
How much revenue does Zigato recognize according to the text?
` 60 lakhs
What part of revenue does the GST of ` 40 lakhs represent?
Liability payable to the government
Who bears the loss for any unsold tickets in Trip Deal's business?
Trip Deal
When is performance in a transaction involving the sale of goods considered achieved?
When property in the goods is transferred to the buyer or all significant risks and rewards are transferred
What conditions need to be fulfilled for performance to be achieved in a sale of goods transaction?
Transfer of property in the goods or transfer of significant risks and rewards to the buyer
In situations where transfer of property does not coincide with transfer of risks, when is revenue recognized?
At the time of significant risks and rewards transfer to the buyer
What is one key factor for recognizing revenue in a sale of goods transaction?
The amount of consideration derived
Why might revenue be recognized before property transfer in certain cases?
Because risks and rewards have been significantly transferred to the buyer
In a sale of goods transaction, what triggers revenue recognition?
Transfer of property or significant risks and rewards to the buyer
When should KY recognize revenue for Machine 1 installation?
On 2 April 20X1
Which machine required significant assistance for installation?
Machine 2
What was the installation fee for Machine 2?
$10,000
Which machine had a higher sale price?
Machine 1
When did ST install Machine 1?
$2 April 20X1
What indicates that GH has not transferred significant risks and rewards of ownership to the customer for televisions?
Insurance proceeds
When is revenue recognized for a simple installation like plugging in a refrigerator?
After the customer agrees to purchase the goods
In a sale and repurchase arrangement, what should be recognized in the books of the seller instead of a sale?
Borrowing
What should be deducted in determining revenue related to trade discounts and volume rebates given?
Cost of goods sold
When are trade discounts and volume rebates received not considered as revenue?
When deducted from cost
What is the accounting treatment for a borrowing made under a sale and repurchase arrangement?
Recognition of borrowing
In a sale and repurchase arrangement, what transaction occurs on the date of repayment?
Repayment of loan taken from the other party
What should the company do if it is reasonably certain of collecting the `15 lakhs from customers for sales made from 1st January, 20X2 to 31st March, 20X2?
Recognize the additional revenue in the financial statements for the year 20X1-20X2.
If the company is not reasonably certain about collecting the `15 lakhs from customers for sales made from 1st January, 20X2 to 31st March, 20X2, what should the company do?
Postpone recognition of revenue and disclose it in the financial statements for the year 20X1-20X2.
When did the Board of Directors decide to increase the sale price of certain items retrospectively?
31st March, 20X2
What should a company do if it cannot reasonably assess ultimate collection of additional revenue due to price revision?
Postpone recognition of revenue and disclose it in 20X1-20X2 financial statements.
In which year would a claim passed for payment in March, 20X3 but lodged in March, 20X1 be recorded?
20X2
What should a company do if a claim lodged with Railways is passed for payment at a lower amount than claimed?
Record the paid amount as revenue.
Test your knowledge on revenue recognition principles and sale arrangements in accounting. Learn about recognizing revenue for simple installations and financing arrangements in sales. Explore examples to understand the concepts better.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
