Cloud Storage Inc. promises to pay its employees a year-end bonus "if profits continue to be high and management agrees at the time." This is O a. accord and satisfaction. b. past consideration. c. an enforceable contract. O d. an illusory promise.
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- . An entity has agreed to a three-year contract with a customer. Recognizing revenue from long-term contracts over a period of time is not required when A. The customer consumes the performance obligation as it is being delivered. B. The customer has direct use of the performance obligation. C. The customer has control over the performance obligation while it is being created. D. The entity has no alternative use for the performance obligation36. In the following liabilities, the payee is known, however, the amount may have to be estimated. Which is the exception? a. provision for restructuring costs b. provision for decommissioning costs c. provision for staff bonus d. liability on customer loyalty creditsWhich of the following statements are true? а. Revenue should be generally recognized when the company satisfies the performance obligation. O b. Revenue should be generally recognized when cash is received. С. Revenue should be generally recognized when production is completed. O d. Revenue should be generally recognized when the warranty expires.
- 2. Which is a valid statement regarding recognition of liabilities? * a. A non-interest bearing note is initially recognized at face value. b. A provision should not be O recognized for future operating losses. c. For accumulating compensated absences, an entity should recognize the expense and related liability during the period the absences are incurred by the employees. d. The estimated future costs of supplying awards for customer loyalty program shall be recognized as an expense in the period the award credits are availed of by customers._____ is a contract that involves compensation for specific potential future losses in exchange for periodic payments and that provides for the transfer of the risk of a loss, from one entity to another, in exchange for a premium. a.Spot contract b.Insurance c.Hedging d. Forward contractVested benefits a. Usually require a certain minimum number of years of service b. Are those that the employee is entitled to receive even if fired c. Are not contingent upon conditional service under the plan d. Are defined by all of the above statements
- 24. Hire purchase agreement refers to A. an agreement between the lessee and the lessor for using a particular asset over a period of time against the periodic payments B. an agreement whereby a person hires goods for a period of time by paying installments and can own the goods at the end of the agreement if all installments are paid C. arrangement whereby one party sells goods to a second party with the promise to repurchase the goods at a future point in time D. an agreement whereby one party hires a particular asset for a set time period at a fixed monthly costDefine the following: Condition Civil loss Reciprocal obligations Pure obligation Potestative condition Problems Explain or state briefly the rule or reason for your answer. 1. D (debtor) borrowed P20,000 from C (creditor) payable on or before August 30. Before the arrival of the due date, C agreed to the promise of B to pay C if B wants. Can C insist that B pay not later than August 30? 2. Suppose in the same problem, D obliges himself to pay C P10,000 after C has paid his obligation to T. Is the obligation valid? 3. S (seller) agreed to sell to B (buyer) a specific car for P200,000, delivery of the car and the payment of the price to be made on June 15. Suppose S delivered the car on June 15 but B failed to pay the price, what are the remedies of S? 4. S sold a parcel of land to B for P240,000 payable in installments of P20,000 a year. The land was delivered to B who obtained ownership thereof. After B had paid P200,000, he could no longer continuing paying in view of…10. Which is correct about covenants? a. Covenants are written promises of the issuer that is enforceable by law. b. Covenants are promises to do and not to do. c. Covenants include interest and principal payments. d. Covenants include a prohibition against disposing of collateral. e. An employee receives minimal income at their early career stage but eventually he/she receives f. All of the above g. None of the above
- An item that is not a contingent liability is: A. premium offer to customers for labels or box tops. B. accommodation endorsement on customer note. C. additional compensation that may be payable on a dispute now being arbitrated. D. note receivable discounted. A loss contingency that should be accrued is: A. note receivable discounted. B. pending lawsuit C. tax in dispute D. estimated claim under a service warranty on new products sold.Franchise revenue are recognized over time if: a. Franchise rights are transferred with a right to use.b. The franchisor is providing initial services without any future obligations to be performed.c. The franchise fee is payable upon signing of the contract.d. The franchisor is providing ongoing services throughout the period of the contract.Fill in the blanks to complete sentence. 8. ______bond ensures the repayment of the advance by the exporter in the event of the non-performance of his contractual obligations.
