Revenue Recognition Quiz

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Which principle requires companies to recognize revenue in the accounting period in which the performance obligation is satisfied?

Revenue Recognition Principle (correct)

Matching Principle

Expense Recognition Principle

Conservatism Principle

When should Dave's Dry Cleaning record revenue for the service performed?

In July when it received the cash

In the first week of July when customers claim and pay for their clothes

In June when it performed the service (correct)

In the accounting period when it satisfies the performance obligation

What is the expense recognition principle also known as?

Revenue Recognition Principle

Conservatism Principle

Matching Principle (correct)

Materiality Principle

According to the expense recognition principle, when should expenses be recognized?

Expenses should follow the revenues Signup and view all the answers

If a company agrees to perform a service or sell a product to a customer, what does it have?

A performance obligation Signup and view all the answers

According to the revenue recognition principle, companies recognize revenue in the accounting period in which the performance ______ is satisfied.

obligation Signup and view all the answers

Dave’s Dry Cleaning should record revenue in ______ when it performed the service rather than in July when it received the cash.

June Signup and view all the answers

Expense recognition is tied to ______.

revenues Signup and view all the answers

Accountants follow the rule of letting ______ follow the revenues when recognizing expenses.

expenses Signup and view all the answers

When a company agrees to perform a service or sell a product to a customer, it has a ______ obligation.

performance Signup and view all the answers

Revenue Recognition Quiz

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Questions and Answers

Which principle requires companies to recognize revenue in the accounting period in which the performance obligation is satisfied?

When should Dave's Dry Cleaning record revenue for the service performed?

What is the expense recognition principle also known as?

According to the expense recognition principle, when should expenses be recognized?

If a company agrees to perform a service or sell a product to a customer, what does it have?

According to the revenue recognition principle, companies recognize revenue in the accounting period in which the performance ______ is satisfied.

Dave’s Dry Cleaning should record revenue in ______ when it performed the service rather than in July when it received the cash.

Expense recognition is tied to ______.

Accountants follow the rule of letting ______ follow the revenues when recognizing expenses.

When a company agrees to perform a service or sell a product to a customer, it has a ______ obligation.

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