Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Revenue Recognition and Expense Recognition

Financial Accounting

3. Accrual Accounting Concepts

Revenue Recognition and Expense Recognition

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Revenue is likely recognized over time for all the following arrangements except for:

A landscaping company maintains a property under a one-year contract.

A company sells inventory to a customer with delivery occurring at a later date.

A software company provides ongoing support services for a year.

A construction company builds a bridge over a two-year period.

Previous problemNext problem

Verified step by step guidance

Step 1: Understand the concept of revenue recognition over time. Revenue is recognized over time when the performance obligation is satisfied progressively, rather than at a single point in time. This typically applies to contracts where services or goods are delivered continuously or in stages.

Step 2: Analyze each arrangement provided in the problem to determine whether revenue is recognized over time or at a point in time. For example, maintaining a property under a one-year contract involves ongoing services, which suggests revenue recognition over time.

Step 3: Consider the arrangement where inventory is sold to a customer with delivery occurring at a later date. In this case, the performance obligation is satisfied at the point of delivery, not progressively over time. Therefore, revenue is recognized at a single point in time.

Step 4: Evaluate the software company providing ongoing support services for a year. Since the support services are provided continuously over the contract period, revenue is likely recognized over time.

Step 5: Assess the construction company building a bridge over a two-year period. Construction projects often involve progressive satisfaction of performance obligations, making revenue recognition over time appropriate.