Revenue is recognized when: Multiple Choice

it is collected in cash. the customer places the order.

service is rendered.

performance obligations are satisfied, and collection is probable.

the contract is signed.

Interperiod income tax allocation:

Multiple Choice

• involves only items appearing below income from continuing operations in the income statement.

• generally has no effect on the balance sheet.

• arises because certain revenues and expenses appear in the financial statements either before or after they are included on the income tax return.

• involves the allocation of income taxes on certain taxable items of the same period.

  The objective of financial reporting is:

  Multiple Choice

• to require all companies to comply with GAAP.

• to provide the market value of a firm at a point in time.

• to provide the total market value of its common stock.

• to provide information useful for decision making by investors and creditors.