Question: Help me to answer number 5,6,7 Thanks Problems PROBLEM 9.1 in the following examples, indicate whether it was proper for X to record the particular
Problems PROBLEM 9.1 in the following examples, indicate whether it was proper for X to record the particular amount of revenue according to accepted recognition principies (accrual system). Your answer shouid be 'yes' or 'no'. Give reasons for your answers. 1. X received a cheque for $500 from a customer in full payment for an item to be shipped DDP (delivered duty paid) destination. The common canier now has possession of the item. X recorded $500 as revenue. 2. A customer purchased a television set from X for $600 and paid cash. However, since he was going to Europe, he asked X to deliver the television set next month. X immediately recorded the $600 cash as revenue 3. X sold a motor vehicle to Y for $10 000 in December. Y paid a deposit of $1000 and agreed to pay the balance by monthly instalmenis beginning in January of the next accounting year Y's credit rating is good. X recorded $1000 as revenue for the year ended 31 December 4. X purchased a $10 000, 10 per cent corporate debenture at par on 1 March of this year. Interest is paid every 1 March and 1 September. X received $500 cash interest on 1 September and recorded the $500 as total interest revenue for the year ended 31 December. 5. Xoperates a garage. He repaired Y's car for $600 last year. There is no reason to doubt Y's ability to pay. X received payment this year and recorded the payment of $600 as revenue this year. 6. X delivered $2000 worth of merchandise on consignment to Y, the consignee. X recorded $2000 as sales revenue. 7. X is a management consultant and was asked by Y to conduct a study on the feasibility of selling a new product, D. The study was not completed until 20 January Year 10 but, at the end of Year 9, X estimated that she had rendered $2000 worth of services and recorded that amount as Service Revenue
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