M3 - Revenue Recognition: Part 1

Question 1

Franchisor’s should report revenue from initial franchise fees when:

Answer 1

all performance obligations of the sale have been satisfied.

Question 2

A deferred revenue is a liability until the service has been performed. (true or false)

Answer 2

True

Question 3

Deferred credit represents future income contracted for and/or collected in advance, but which has not yet been earned by the passing of time or other criteria. (true or false)

Answer 3

true

Question 4

What are examples of input methods that you could use to recognize revenue for a contract that will be distributed over long period of time?

Answer 4

Labor hours expended, cost incurred to total expected costs, resources consumed.

Question 5

What is an example of an output method that you could use to recognize revenue for a contract that will be distributed over long period of time?

Answer 5

milestones achieved