3 2 learning objective 3 2 1 the revenue principle determines when to record revenue 4298034
3.2 Learning Objective 3-2
1) The revenue principle determines when to record revenue and the amount of revenue to record.
2) The revenue principle states that revenue should be recorded in the same period as the cash is received.
3) In the retail industry, income is recognized under IFRS when the cash is received.
4) The matching principle matches cash receipts and cash disbursements.
5) Expenses have a future benefit to the company.
6) The expense recognition principle recognizes expenses in the same period in which any related revenues are earned.
7) Cash accounting provides some ethical challenges that accrual accounting avoids.
8) Revenue recognition:
A) does not vary by industry under GAAP.
B) is less detailed under GAAP than under IFRS.
C) for the retail industry is similar under GAAP and IFRS.
D) under IFRS leaves no room for interpretation on the part of the company .
9) On December 15, 2012, a company receives an order from a customer for services to be performed on December 28, 2012. Due to a backlog of orders, the company does not perform the services until January 3, 2013. The customer pays for the services on January 6, 2013. The revenue principle requires the revenue to be recorded by the company on:
A) December 15, 2012.
B) January 3, 2013.
C) December 28, 2012.
D) January 6, 2013.
10) On July 25, Hockey Company's accountant prepared a check for August's rent payment. Hockey Company mails the check on July 27 to the landlord. The landlord receives the check on July 31 and cashes the check on August 2. When should Hockey Company record the rent expense associated with this transaction?
A) July 25
B) July 27
C) August 31
D) August 2