Understanding Revenue Recognition: Goals and Definitions, Quizzes of Financial Accounting

Download Understanding Revenue Recognition: Goals and Definitions and more Quizzes Financial Accounting in PDF only on Docsity! TERM 1 goal 1: remove the ____ and ____ in revenue requirements DEFINITION 1 inconsistencies and weaknesses TERM 2 Goal 2: provide a more _____ _____ for addressing revenue issues DEFINITION 2 robust framework TERM 3 Goal 3: Improve ______ of revenue recognition practicies across entities industries, jurisdictions and capital markets DEFINITION 3 comparability TERM 4 Gal 4: Provide more useful information to _______ through improved _______ requirements DEFINITION 4 users of financial statements, disclosure TERM 5 Goal 5: Simplify the preparation of _____ by ______ the number of requirements to which an entity must refer DEFINITION 5 financial statements, reducing TERM 6 contract DEFINITION 6 an agreement between two or more parties that creates enforceable rights and obligation (written, oral or implied) TERM 7 performace obligation DEFINITION 7 a promise in a contract with a customer to transfer a good or service to the customer. TERM 8 Transaction price DEFINITION 8 the amount of consideration (for example, payment) to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties TERM 9 variable consideration DEFINITION 9 If the amount of consideration in a contract is variable, an entity should determine the amount to include in the transaction price by estimating either the expected value (that is, probability-weighted amount) or the most likely amount, depending on which method the entity expects to better predict the amount of consideration to which the entity will be entitled. TERM 10 noncash consideration DEFINITION 10 If a customer promises consideration in a form other than cash, an entity should measure the noncash consideration (or promise of noncash consideration) at fair value.