1. All of the following categories have established revenue recognition criteria except

a) contracts

b) collection of accounts receivable

c) sales of goods

d) provision of services

2. Oceans Limited sold $1,750,000 worth of goods during the current year. The cost of goods sold is $1,050,000. Credit sales were $1,575,000, of which 40% were still outstanding. How much cash was collected by Oceans Ltd.?

a) $805,000

b) $1,120,000

c) $175,000

d) $1,575,000

3. Performance obligations relate to:

a) transaction price

b) input costs of products or services

c) customer payment terms

d) distinct goods or services

4. Which of the following statements is incorrect?

a) if the current ratio is too high the company may not be managing its assets effectively.

b) if the current ratio is too high the company may have an insignificant amount of receivables.

c) If the current ratio is too high the company may have overly high levels of inventory.

d) If the current ratio is too high the company may have too much cash on hand.

5. If a company recorded a)$5,500 credit card transaction and the credit card discount was 4%, what is the correct entry to accounts receivable?

a) Cr.. Accounts Receivable $5,720

b) Dr. Accounts Receivable $5,720

c) Dr. Accounts Receivable $5,280

d) Cr. Accounts Receivable $5,280