QUESTION 2

a. Identify and briefly explain fundamental qualitative characteristics of useful information. (4 marks)

b. Define 'contract' in accordance with MFRS 15 Revenue from Contracts with Customers. (1 mark)

c. List any three (3) criteria of a contract that must be met before applying revenue guidance under MFRS 15 Revenue from Contracts with Customers. (3 marks)

d. On 1 January 2019, Ceria Berhad have a contract with Jeanne. Jeanne has signed a 24-month telecommunication plan. The terms of the plan are:

1. Jeanne 's monthly fixed fee is RM150.

2. Jeanne receives a free smartphone at the inception of the plan. Customers may purchase the same smart phone from Ceria Berhad for RM700 without the payment plan. They may also enter into fixed payment plan without a smart phone for RM120 per month. The company closes its accounts on 30 June every year.

i. Prepare the journal entry to show how Ceria Berhad should recognise revenue from this plan in accordance with MFRS 15 Revenue from Contracts with Customers on 1 January 2019. (5 marks)

ii. Calculate the revenue Ceria Berhad would recognise in the year ended 30 June 2020. (2 marks) [15 marks]