Question Details

What is the general approach as to when product costs are recognized as expenses 



1.	Which of the following are the two components of the revenue recognition principle?
a.	Cash is received and the amount is material.
b.	It is probable that future economic benefits will flow to the company and it is possible to reliably measure the amount.
c.	Production is complete and there is an active market for the product.
d.	Cash is realized or realizable and production is complete.

	2.	Which of the following practices may not be an acceptable deviation from recognizing revenue at the point of sale?
a.	Upon receipt of cash.
b.	During production.
c.	Upon receipt of order.
d.	End of production.
3.	Which of the following is not a required component of financial statements prepared in accordance with generally accepted accounting principles?
a.	President's letter to shareholders.
b.	Statement of financial position.
c.	Income statement.
d.	Notes to financial statements.
	4.	What is the general approach as to when product costs are recognized as expenses ?
a.	In the period when the expenses are paid.
b.	In the period when the expenses are incurred.
c.	In the period when the vendor invoice is received.
d.	In the period when the related revenue is recognized.

	5.	Not adjusting the amounts reported in the financial statements for inflation is an example of which basic principle of accounting?
a.	Economic entity.
b.	Going concern.
c.	Historical cost.
d.	Full disclosure.



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