答案和详解如下： 16.If a reliable estimate of total costs of the contract does NOT exist, which of the following revenue recognition methods should be used? A) Completed contract method. B) Percentage-of-completion method. C) Installment sales method. D) Cost recovery method. The correct answer was A) The installment sales method is used when the assurance of payment and estimated bad debts does not exist before cash is collected. Sales revenue and COGS are recognized only when cash is received. The cost recovery method is used when future cash collections are not assured even after receipt of partial payments. Gross profit is not recognized until all of the cost of goods sold is collected. The percentage-of-completion method is used when ultimate payment is assured and revenue is earned as costs are incurred. Profit is recognized corresponding to the percentage of costs incurred to the total estimated. 17.Which revenue recognition method is used when the payment is assured and revenue is earned as costs are incurred? A) Installment sales method. B) Completed contract method. C) Percentage-of-completion method. D) Cost recovery method. The correct answer was C) The installment sales method is used when the assurance of payment and estimated bad debts does not exist before cash is collected. Sales revenue and COGS are recognized only when cash is received. The completed contract method is used when a reliable estimate of the total costs does not exist and the amount of revenue cannot be determined until the contract is finished. Revenue is recognized only when the contract is completed and the title is transferred. The cost recovery method is used when future cash collections are not assured even after receipt of partial payments. Gross profit is not recognized until all of the cost of goods sold is collected. 18.As a general rule, revenue is normally recognized when it is: A) earned. B) realized and earned. C) measurable and received. D) measurable. The correct answer was B) Under the accrual concept, revenue is recognized when the earnings process is completed (earned) and ultimate realization (cash receipt) is assured. 19.An oil exploration company has been contracted to dig 100 exploratory holes for $200,000. The cost to complete this job is estimated to be $150,000, but the company doesn’t recognize any of the $50,000 profit until the job is completed. Which revenue recognition method is being used? A) Completed contract method. B) Percentage-of-completion method. C) Sales basis method. D) Cost recovery method. The correct answer was A) The completed contract method doesn't recognize revenue and expense until the contract is completed. The percentage-of-completion method would have recognized a portion of the $50,000 profit prior to completion. 20.Which, if any, of the following statements about the installment sales method and cost recovery method is correct? A) The cost recovery method recognizes revenue and associated costs of goods sold only when cash is received, based on gross profit margin. B) The installment sales method recognizes sales when cash is received, but no gross profit is recognized until all of the cost of goods sold is collected. C) Neither statement is correct. D) Both statements are correct. The correct answer was A) Neither statement is correct because the definitions are reversed. | 
发表于 2008-4-10 10:51
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