Revenue Recognition Quiz
10 multiple-choice questions with answers and explanations · 3 easy, 5 medium, 2 hard
The five-step model, performance obligations, revenue over time, principal versus agent, and cash received before performance.
- 1Revenue Recognition — BasicUnder the accrual basis of accounting, revenue is recognised when:easy
- 2Accrual Accounting — When Is Revenue Recognized?Under accrual accounting, revenue is recognized when:easy
- 3Services Performed on Account — EffectA firm performs $3,000 of services on account (to be collected next month). The immediate effect is:easy
- 4Deferred RevenueA magazine publisher receives $240 for a 12-month subscription on 1 October. At 31 December (year-end), deferred revenue on the balance sheet is:medium
- 5Gift Card Breakage — IFRS 15Under IFRS 15, expected gift card breakage (amounts that will never be redeemed) is recognized as revenue:medium
- 6Unearned Revenue — Year-End AdjustmentOn December 1 a company received $9,000 for three months of service (December–February). The December 31 adjusting entry is:medium
- 7IFRS 15 — The Five-Step ModelThe FIRST step in the IFRS 15 five-step revenue model is:medium
- 8IFRS 15 — Principal vs AgentAn online platform sells a $100 ticket on behalf of an event organizer and keeps a $10 commission. Acting as an AGENT, the platform recognizes revenue of:medium
- 9IFRS 15 — Allocating the Transaction PriceA $1,200 bundle includes a device (standalone selling price $1,000) and a support service (standalone selling price $500). The revenue allocated to the device is:hard
- 10IFRS 15 — Revenue Recognized Over Time (Input Method)A $900,000 construction contract qualifies for over-time recognition. Costs incurred to date are $200,000 against total expected costs of $500,000. Revenue recognized to date (cost-based input method) is:hard