CHAPTER 18 REVENUE RECOGNITION MULTIPLE CHOICE—Conceptual Answer No. Description
c 1. Revenue recognition principle.
b 2. Definition of "realized."
a 3. Definition of "earned."
d 4. Recognizing revenue at point of sale.
d 5. Recording sales when right of return exists.
c 6. Revenue recognition when right of return exists.
d 7. Revenue recognition when right of return exists.
b 8. Appropriate accounting method for long-term contracts.
c 9. Percentage-of-completion method.
b 10. Percentage-of-completion method.
c 11. Classification of progress billings and construction in process.
b 12. Calculation of gross profit using percentage-of-completion.
a 13. Disclosure of earned but unbilled revenues.
c 14. Revenue, cost, and gross profit under completed contract.
b 15. Disadvantage of using percentage-of-completion.
a 16. Loss recognition on a long-term contract.
c 17. Accounting for long-term contract losses.
d 18. Criteria for revenue recognition of completion of production.
a 19. Completion-of-production basis.
c 20. Presentation of deferred gross profit.
c 21. Appropriate use of the installment-sales method.
b 22. Valuing repossessed assets.
b 23. Gross profit deferred under the installment-sales method.
b 24. Income recognition under the cost-recovery method.
b 25. Income recognition under the cost-recovery method.
d 26. Cost recovery basis of revenue recognition.
d *27. Allocation of initial franchise fee.
a *28 Recognition of continuing franchise fees.
b *29. Future bargain purchase option.
a *30. Option to purchase franchisee's business agreement.
d *31. Revenue recognition by the consignor.

MULTIPLE CHOICE—Computational Answer No. Description
c 32. Percentage-of-completion method.
c 33. Percentage-of-completion method.
b 34. Determine cash collected on long-term construction