6 A seris of equal periodic payments in which the first payment is made one compounding period after the date of the contract is: A. A deferred annuity B. An ordinary annuity. C. An annuity due. D. A delayed annuity E. An annuity in advance. 7. Six Guys sells fast-food franchises. Six Guys receives $76,000 from a new franchisee for providing initial training, equipment, and funishings that together have a stand-alone selling price of $76,000 Six Guys also receives $36,300 per year for use of the Six Guys name and for ongoing consulting services (starting on the date the franchise is purchased). Rachel became a Six Guys franchisee on March 1, 2018, and on May 1, 2018 Rachel had completed training and was open for business. How much revenue in 2018 will Six Guys recognize for its arrangement with Rachel? A. $0 B. $30,250 C. S76.000 D. $106,250 E. $112,300 8. Which of the following is true regarding consignment arrangements? A. Revenue is recognized at the point in time when the consignment arrangement is made. B. Revenue is recognized when goods are transferred to the consignee. C. Revenue is recognized upon sale by the consignee to an end customer. D. Revenue is never recognized because GAAP does not allow such E. None of the above is true. arrangements 9. The calculation of the revenue recognized in the third year of a five-year construction contract using the percentage-of-completion method includes the ratio of: A. Total costs incurred to date to total estimated costs. B. Total costs incurred to date to total billings to date. C. Costs incurred in year three to total estimated costs. D. Costs incurred in year three to total billings to date. E. Future costs to be incurred to total billings to date. 10. In accounting for a long-term construction contract using the percentage-of-completion method, the billings account is a: A. Contra current asset account B. Contra noncurrent asset account. C. Noncurrent liability account. D. Revenue account E. Loss account 11. When the allowance method of recognizing bad debt expense is used, the entry to record the write- off of a specific account: A. Decreases both accounts receivable and the allowance for doubtful accounts. B. Decreases accounts receivable and increases the allowance for doubtful accounts. C. Increases the allowance for doubtful accounts and decreases net income. D. Decreases both accounts receivable and net income. E. Decreases both net income and the allowance for doubtful accounts