1. Under ASC Topic 606, which of the following is not a criteria for revenue recognition?

a. Collectibility is probable.

b. Rights regarding goods or services have been identified.

c. The shipping terms are clearly stated in the contract.

d. Delivery has occurred or services have been rendered.

2. In the case of sales where the customer is billed before delivery of the goods,

a. the seller should always recognize revenue before the products are delivered to the customer.

b. the goods belong to the customer and revenue recognition is deferred until delivery.

c. the seller may recognize revenue if control of the goods has been transferred to the customer even though physical delivery has not taken place.

d. revenue will not be recognized until the goods are shipped to the customer.

3. Which of the following statements is not true regarding ASC Topic 606?

a. Long-term construction contracts is an area where the new standard clearly differs from existing guidance.

b. Current guidance on long-term contracts gives more flexibility to firms for determining when revenue is recognized.

c. The new standard precludes the use of percentage-of-completion method for long-term construction contracts.

d. Adoption for calendar reporting entities is first required for calendar 2018.

4. Which of the following statements is true prior to ASC Topic 606 regarding accounting for revenue recognition?

a. At the end of a long-term construction project, "retained earnings" will be the same whether the completed-contract or the percentage-of-completion method of accounting is used for the project.

b. Under GAAP, the completed-contract method is always an acceptable alternative to the percentage-of-completion method of accounting for a long-term construction project.

c. Input measures are not applicable to any revenue recognition accounting method.

d. Net asset balances will be the same no matter what revenue recognition method is used.

5. Under U.S. GAAP, cash interest from investments is reported on the statement of cash flows as part of investing activities whereas under IFRS, cash interest from investments is reported as part of financing activities.

True or False