chapter 5.5 Question 3( 5 Marks) answers the following multiple choice questions with the most correct answer

Under the contract-based approach, revenue is recognized when: O a company's net position is increased. O when the transaction price is determined. O when the performance obligation has been defined. O the contract has commercial substance. When following ASPE, all of the following criteria must be satisfied in order to recognize revenue for the sales of goods under the earnings based approach, except O the service has been performed. O the risks and rewards have been transferred to the customer. O the seller has no continuing involvement. O collection is reasonably assured. Melanie purchases an new Honda Civic. During the negotiations the sales representative gives her the opportunity to purchase a 10-year bumper to bumper warranty. This is referred to as a(n): Assurance warranty O Purchase warranty O Money back guarantee O Service warranty Magic Mountain accounts for revenues using the contract-based approach. It operates a ski resort in the Rocky Mountains of Alberta. They sell three types of ski tickets. Season tickets are sold throughout the year, and entitle the holder to ski any day all season long. They are non-refundable. Daily tickets are sold at the mountain and are only valid for the day they are sold. Corporate group tickets are sold throughout the year. The buyer receives a package of 20 daily ticket coupons at a discounted price and the coupons can be redeemed for a day of skiing any time during the season. The skier needs to present the coupon for a ticket on the desired ski day. Unused tickets (coupons) expire at the end of the season and are non-refundable. How should Magic Mountain account for the corporate tickets not redeemed? They should estimate an amount at the time of sale and recognize it as revenue then. They should estimate an amount at the time of sale and recognize it as revenue evenly throughout the ski season. They should estimate an amount at the time of sale and recognize it as revenue proportionally every time a coupon is redeemed. They should recognize it as revenue at the end of the ski season. Under ASPE, when revenue is earned from the sale of goods under the earnings based approach, all of the following criteria must be met before revenue can be recognized except O the amount of consideration received can be measured with reasonable assurance. collection is reasonably assured. all sales returns and allowances have been recorded. O risks and rewards of ownership have been transferred to the customer