14 1 point Etsy, Inc. is a two-sided online marketplace for unique and homemade goods. Through its website, Etsy.com, Etsy offers sellers a marketplace along with a range of seller tools and services that are specifically designed to help creative entrepreneurs generate more sales. Etsy generates revenue from listing fees, transaction processing fees, and services revenue. In its 10-K for 2018, Etsy, Inc. disclosed the following information about its services revenue: Services revenue is derived from optional services offered to sellers, which primarily include advertising services and shipping labels. Etsy's on-site advertising service consists of cost-per-click fees an Etsy seller pays for prominent placement of her listings in search results in the Etsy.com marketplace. Cost-per-click fees are nonrefundable and are charged to a seller's Etsy bill when the ad is clicked. Revenue from shipping labels consists of fees an Etsy seller pays the Company when she purchases shipping labels through its platform, net of the cost the Company incurs in purchasing those shipping labels. The Company provides its sellers access to purchase shipping labels at discounted pricing due to the volume of purchases through its platform. The Company does not take control of shipping labels prior to transferring the labels to the Etsy seller. Should Etsy recognize advertising revenue and revenue from shipping labels on a gross basis or on a net basis? Etsy should recognize revenue related to advertising on a gross basis with an offsetting expense recorded in cost of revenue. Etsy should recognize shipping label revenue on a net basis because it is acting as agent in the arrangement. Etsy should recognize revenue related to advertising on a net basis after deducting the cost of revenue. Etsy should recognize shipping label revenue on a gross basis because it is acting as principal in the arrangement. Etsy should recognize revenue related to advertising on a gross basis with an offsetting expense recorded in cost of revenue. Etsy should recognize shipping label revenue on a gross basis because it is acting as principal in the arrangement. Etsy should recognize revenue related to advertising on a net basis after deducting the cost of revenue. Etsy should recognize shipping label revenue on a net basis because it is acting as agent in the arrangement. 19) Wee Sing Co. conducts music classes for toddlers and their caretakers. Wee Sing Co. also runs birthday parties for toddlers. Wee Sing Co. charges $300 to host a birthday party. When a customer purchases a birthday party, the customer also can keep the children's musical instruments that were used for free. Wee Sing Co. does not offer birthday parties without the musical instruments. Its cost per party is variable depending on the location of the party and music instructor. The same children's musical instruments could be purchased online for $24. A nearby competitor hosts children's birthday parties for $216. Wee Sing Co. and its accountants determine that, when a customer hires Wee Sing Co. to host a birthday party, the birthday party and the musical instruments are separate performance obligations. For the purposes of revenue recognition, which method should Wee Sing Co. use to determine the standalone selling price of a birthday party and the musical instruments? 1) Adjusted market assessment approach 2) Percentage-of-completion approach 3) Expected-cost-plus-margin approach 4) Residual approach 20) In its 10-Q for the second quarter of 2017, United Parcel Service, Inc. (also known as UPS) disclosed the following information about its employee benefits plan: Plan Amendments and Curtailments in the quarter ended June 30, 2017, we amended the UPS Retirement Plan to cease accruals of additional benefits for future service and compensation for non-union participants. We remeasured plan assets and pension benefit obligations for the affected pension plans, resulting in a net actuarial gain of $569 million. This (net actuarial gain) reflects a reduction of approximately 0.32 percent in the discount rate on the pension obligation). The actuarial gain reduced the actuarial loss recorded in "accumulated other comprehensive loss" in the equity section of the consolidated balance sheet. As actuarial losses are within the corridor, there is no impact to the statement of consolidated income for the quarter ended June 30, 2017. Because UPS ceased accruals of additional pension benefits for future service as of June 30, 2017, after June 30, 2017 UPS did not record in other words, recorded zero for) which of the following? 1) Service cost 2) Interest cost 3) Amortization of prior service cost 4) Expected return on assets