Reference no: EM132841768

Question 1 - Under ASPE, at what point would these revenues generally be recognized in the financial statements?

A company sells clothes wholesale from its factories overseas to department stores in Canada. The shipping terms are freight on board (FOB) shipping point.

A- When the return period has expired

B- When future benefits of an asset expire

C- When the clothes are shipped to the customer

D- When the clothes are received by the customer

Question 2 - Which of the following statements regarding revenue recognition under ASPE is true?

A- When customers have a right to return a product and the returns can be estimated, revenue should be recognized net of returns.

B- Revenue is presented on a gross basis, before considering discounts, returns and allowances, and sales and excise taxes.

C- When the amount of consideration cannot be determined, the entity should use its best estimate to record revenue.

D- Refundable fees for service should be recorded as revenue, and the revenue reversed when the fee is refunded.

Question 3 - Which of the following would be considered revenue under ASPE?

A- Good Corp. is a retailer of electronic goods and is in the process of renovating its stores. The company sells its shelving that is no longer being used for $12,000.

B- Average Ltd., a manufacturer of metal ingots, sells an industrial forge that is no longer being used for $25,000.

C- Excellent Co. sells appliances and has recently decided to start delivering the appliances for a fee. Excellent sold a fridge to a customer and charged $75 for a delivery fee.

D- Great Inc. is a consignee of sculptures and sells one piece for $8,000. The cash is then sent to the artist.

Question 4 - On February 1, 2020, Manna Corp. (Manna) signed a contract to provide cleaning services to a customer for a one-year period. On that date, the customer paid a deposit of $200. The cleaning will be performed monthly, and the annual cleaning fees are $3,000. Manna performed the cleaning in February and March but has not yet been paid for its services. Manna has a March 31 year end and reports under ASPE. How much revenue should Manna recognize from this contract for its March 31, 2020, year end?

A- $0

B- $200

C- $500

D- $3,000

Question 5 - Which of the following is one of the three criteria for ASPE revenue recognition?

A- Delivery has occurred.

B- Revenue can be reliably measured.

C- The customer has received the invoice.

D- Customer payment has been received.