Questions
Questions
Short answer

Consider the following events: On 1 May 2025, a firm receives an order from a customer to deliver 200 units of one of its products at an agreed upon price of $5 per unit. On 20 May 2025, the firm delivers 150 units, and on 15 June 2025 the other 50 units. The firm bills the customer after each delivery over the value of the delivered goods, and requires a 30-day payment period, which the customer fully utilizes. Further assume that the firm follows a standard financial year in Australia (1 July to 30 June). By how much is the recognised revenue in financial year 2024/2025 larger under accrual accounting (IFRS) than under cash accounting? Note: Provide your answer without currency units, i.e., X,XXX, and show your workings.

View Explanation

View Explanation

Verified Answer
Please login to view
Step-by-Step Analysis
We start by identifying the key dates and revenue recognition rules under IFRS (accrual) versus cash accounting. Step 1 – Under IFRS (accrual): Revenue is recognized when control of the goods passes to the customer, i......Login to view full explanation

Log in for full answers

We've collected over 50,000 authentic exam questions and detailed explanations from around the globe. Log in now and get instant access to the answers!

Similar Questions

Which of the following is not part of the FASB criteria for revenue recognition?

In the financial statement audit, who is responsible for using accurate revenue recognition accounting estimates to prepare the financial statements of publicly traded companies (issuers)?

Question1(c) On 1 July 2019, XYZ Ltd received $100,000 in cash from customer ABC for an order of 100,000 units of its product. By the end of the financial year (assume the financial year starts on 1 July 2019 and ends on 30 June 2020), XYZ Ltd had delivered 35,000 units of product to ABC (selling price per unit is $1). The rest of the cash received in in advance from ABC relates to goods that will be provided in the next financial year. XYZ sets its selling price by employing a 100% mark up on the cost of inventory.Which of the following statements is true for transactions between XYZ and ABC for the financial year ended 30 June 2020? XYZ’s COGS was $35,000 XYZ’s inventory decreased by $35,000 The closing balance of unearned revenue relating to ABC was $35,000 XYZ generated sales revenue of $65,000 from ABC XYZ’s COGS was $17,500 ResetMaximum marks: 1 Flag question undefined

In 2021, Estelle's Star Makers agreed to build a movie theater for $200,000. Expected costs for the theater follow: 2022, $10,000; 2023, $40,000; and 2024, $30,000. Assume that Estelle completed the theater on time and on budget, that Estelle's performance obligation for the theater is fulfilled over time, and that the costs incurred provide a close approximation of the value conveyed to the customer.Answer the following question(s) by filling in the blanks. Do not include any symbols besides decimals in your answers (do not input commas).Compute revenues and expenses for each year 2022 through 2024. Year 2022 2023 2024 Revenue [R2022] [R2023] [R2024] Expense [E2022] [E2023] [E2024] [R2022] = 

More Practical Tools for Students Powered by AI Study Helper

Join us and instantly unlock extensive past papers & exclusive solutions to get a head start on your studies!