Answer:
<u>January 1, 2017</u>
Debit: Accounts Receivable $2800
Credit: Deferred Revenue[Wiring Base] - $1120
Credit: Deferred Revenue[Shelving Unit] - $1680
Narration: Contract Detail and invoicing of the client.
<u>February 5, 2017</u>
Debit Deferred Revenue[Wiring Base] - $1120
Credit Revenue Account - [Wiring Base] - $1120
Narration: Revenue recognition of Wiring Base delivered to customer
<u>February 25, 2017</u>
Debit Deferred Revenue[Shelving Unit]- $1680
Credit Revenue Account - [Shelving Unit] - $1680
Narration: Revenue recognition of Shelf delivered to customer
<u>February 25, 2017</u>
Debit: Bank - $2800
Credit: Accounts Receivable - $2800
Narration: Payment received in settlement of contract fully delivered
Explanation:
The question is an example of a Performance Contract.
A Performance Contract is an agreement with a customer by a vendor to discharge a service or provide goods that are distinct from each other. The accounting for this obligations will therefore be recorded and recognized separately.
It is also important to note that the services or goods must be separately identifiable and the customer must be able to derive from each goods on individually or jointly.
The rule is to
- Recognize the contract and invoice amount with the customer as Deferred Income.
- Identify the distinct obligations and services to be provided.
- Identify the transaction amount for each service or good.
- As each obligation is met, the revenue is finally recognized and transferred from Deferred income.
Answer: the correct answer is a. the competitive firm will attain resource-allocative efficiency, but the monopolist will not
Explanation: the monopoly will not attain allocative efficiency because in theory a monopoly won't lose a single customer even if it raises prices since it is the only company in the market selling that product.
Answer: Managerial Accounting
Explanation:
Managerial accounting refers to the preparation of reports and analysis from the company's accounting information to enable managers decide the ways to go with a company.
This type of accounting is for internal use and so is not subject to the kind of scrutiny that financial accounting gets from accounting bodies such as IASB and the FASB.
An example would be the Supply Manager may ask for a report to be made showing them the increase in supply costs for the past decade from their preferred supplier to enable them make a decision on if to find a new supplier.
Answer: D - A disclosure note is required when the loss is remote and the amount can be reasonably estimated
Explanation:
A contingent liability is an obligation that might arise from an event that would occur in the future.
A contingent liability isn't disclosed when payment is remote.
A contingent liability is recorded when:
1. it is probable the event would occur.
2. there is a reasonable estimate the amount of the loss.
I hope my answer helps.
The correct answer to this question is letter C.
