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CA Inter Revenue Recognition (AS 9) — practice questions

Explore 53 free Revenue Recognition (AS 9) questions in CA Inter Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Revenue Recognition (AS 9) questions and exercises with answers

Showing questions 1–30 of 53.

Revenue recognised before cash is received is called what?Read the answer and worked solution →Cost recovery method books profit only after cash collected exceeds:Read the answer and worked solution →Under the instalment sales method, a firm collects 45% of the price. What share of total profit does it recognise?Read the answer and worked solution →Under long-term contract methods, an expected loss on a contract is recognised:Read the answer and worked solution →A firm cannot estimate returns and has very high return rates. It recognises revenue when:Read the answer and worked solution →Under a buyback covering all costs and holding costs, inventory:Read the answer and worked solution →AS 9 sets bases for revenue recognition in which statement?Read the answer and worked solution →Which is a source of revenue covered by AS 9?Read the answer and worked solution →Which item does AS 9 cover as a revenue source?Read the answer and worked solution →Is revenue from construction contracts dealt with under AS 9?Read the answer and worked solution →Natural increases in herds and forest products are treated how under AS 9?Read the answer and worked solution →AS 9 defines revenue as a gross inflow of what?Read the answer and worked solution →Under AS 9, an agent's revenue is the amount of what?Read the answer and worked solution →Which method books revenue only when the service contract is completed?Read the answer and worked solution →Revenue recognition under AS 9 is mainly concerned with what?Read the answer and worked solution →The revenue amount on a transaction is usually decided by what?Read the answer and worked solution →A key criterion for sale of goods revenue is transfer of what to the buyer?Read the answer and worked solution →Revenue from service transactions is usually recognised when?Read the answer and worked solution →The proportionate completion method applies when performance is what?Read the answer and worked solution →Services by an indeterminate number of acts over a period are recognised on what basis?Read the answer and worked solution →Charges for use of cash or amounts due to an enterprise are called what?Read the answer and worked solution →Charges for use of patents, trademarks and copyrights are called what?Read the answer and worked solution →On what basis does interest usually accrue under AS 9?Read the answer and worked solution →Royalties are usually recognised according to what?Read the answer and worked solution →Foreign interest needing exchange permission, with uncertain remittance, may lead to what?Read the answer and worked solution →Revenue needs to be measurable and what else to be expected?Read the answer and worked solution →Collection of an export incentive claim is uncertain when raised. Revenue is what?Read the answer and worked solution →With no doubt on collection, goods sold on instalments give revenue when?Read the answer and worked solution →Collectability doubt arises after the sale. What is more appropriate?Read the answer and worked solution →If ultimate collection is unreasonable to expect when a claim is raised, what applies?Read the answer and worked solution →

Worked practice questions

Revenue recognised before cash is received is called what?

  1. Capital receipt
  2. Unearned income
  3. Deferred revenue
  4. Accrued revenue
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Correct answer: D. Accrued revenue

Earning income first and receiving cash later creates accrued revenue, an asset.

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Cost recovery method books profit only after cash collected exceeds:

  1. The gross profit expected
  2. The full selling price
  3. The seller's cost of goods
  4. The estimated sales returns
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Correct answer: C. The seller's cost of goods

No profit is booked until the seller has first got back the cost of the item sold.

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Under the instalment sales method, a firm collects 45% of the price. What share of total profit does it recognise?

  1. 45%
  2. 55%
  3. Nil
  4. 100%
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Correct answer: A. 45%

Profit is recognised in proportion to cash collected, so 45% collected gives 45% of the profit.

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More Accounting topics

AS 3 Cash Flow StatementSchedule III Division I Financial StatementsAS 19 LeasesValuation of Inventories (AS 2)AS 22 Taxes on IncomeAS 28 Impairment of AssetsProperty, Plant and EquipmentAS 17 Segment Reporting