Leading Questions TAK

Chapter 9 REVENUE

1. What is revenue?
2. What are the differences among income, revenue and gains?
3. Explain the concept of “earning process”. How does this concept relate to the behavioral view of
revenue?
4. Why are revenue recognition principles needed?
5. What are 3 criteria for revenue recognition? Explain
6. If revenue is recognized, does that mean that the revenue has been realized? Explain your answer
and give an example to support your view.
7. When should revenue be recognized for the following business?
a. A soft drink manufacturer
b. A legal firm
c. A theatre that sells season tickets to musical productions
d. A magazine publishers producing monthly titles
e. A gold-mining company
f. A farmer who grows wheat
g. A company which sells houses on an installment plan; terms of payment extending to 20
years; buyers assume all risks of ownership; buyers pay a deposit of 25 percent of sale price
h. A technology company like ojek and grab
8. What are issues for standard setters pertaining to revenue recognition and measurement?
9. What are issues for auditors surrounding revenue?