questions 1 Generally, revenue from sales should be recognized at a point when Answer a management decides it is appropriate to do so b the product is available for sale to the ultimate consumer c the entire amount receivable has been collected from the customer and there remains no further warranty liability d none of these 2 What is the general approach as to when product costs are recognized as expenses Answer a In the period when the expenses are paid b In the period when the expenses are incurred c In the period when the vendor invoice is received d In the period when the related revenue is recognized 3 Recognition of expense related to amortization of an intangible asset illustrates which principle of accounting Answer a Expense recognition b Full disclosure c Revenue recognition d Historical cost 4 Which accounting assumption or principle is being violated if a company is a party to major litigation that it may lose and decides not to include the information in the financial statements because it may have a negative impact on the company's stock price Answer a Full disclosure b Going concern c Historical cost d Expense recognition 5 Where is materiality not used in providing financial information Answer a Applying the revenue recognition principle b Determining what items to include in the financial statements c Applying the going concern assumption d Determining the level of disclosure

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questions: 1. Generally, revenue from sales should be recognized at a point when Answer a. management decides it is appropriate to do so. b. the

questions:

1. Generally, revenue from sales should be recognized at a point when

Answer

management decides it is appropriate to do so.

the product is available for sale to the ultimate consumer.

the entire amount receivable has been collected from the customer and there remains no further warranty liability.

none of these.

2. What is the general approach as to when product costs are recognized as expenses?

Answer

In the period when the expenses are paid.

In the period when the expenses are incurred.

In the period when the vendor invoice is received.

In the period when the related revenue is recognized.

3. Recognition of expense related to amortization of an intangible asset illustrates which principle of accounting?

Answer

Expense recognition.

Full disclosure.

Revenue recognition.

Historical cost.

4. Which accounting assumption or principle is being violated if a company is a party to major litigation that it may lose and decides not to include the information in the financial statements because it may have a negative impact on the company's stock price?

Answer

Full disclosure.

Going concern.

Historical cost.

Expense recognition.

5. Where is materiality not used in providing financial information?

Answer

Applying the revenue recognition principle.

Determining what items to include in the financial statements.

Applying the going concern assumption.

Determining the level of disclosure.