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MULTIPLE CHOICE QUESTION ASSIGNMENT
Answer the following multiple-choice questions. Indicate your choice by selecting
only one option from the four options given for each question answered.
Use the following information to answer questions 1 and 2:
Pale Ltd sells a trailer to a customer for R121 000 which is payable 24 months after delivery.
The customer obtains control of the product at contract inception on 1 January 2023.
The cash-selling price of the trailer is R100 000, which represents the amount that the
customer would pay upon delivery for the same product sold under otherwise identical
terms and conditions as at contract inception. Pale Ltd’s cost of the trailer is R80 000. An
interest rate of 10% per annum is applicable to the contract and is a significant financing
component.
REQUIRED:
Question 1:
Which one of the following statements is correct based on the information provided above?
1.
Revenue is recognized at an amount of R121 000 at the inception of the contract.
2.
Revenue is recognized at an amount of R100 000 on 31 December 2024
3.
Revenue is recognized at an amount of R100 000 at the inception of the contract
4.
Revenue is recognized at an amount of R121 000 on 31 December 2024
Clear my choice
According to IFRS 15, revenue is recognized at the cash-selling price when control transfers, which is R100 000
on 1 January 2023
,Question 2
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Question 2:
Trades and other receivables will be reflected at an amount of ________________ as at
31 December 2023?
1.
Trades and other receivables are measured at the present value of the amount
R110 000 receivable, which includes interest accrued to date (R100 000 * 1.10 = R110 000)
2.
R100 000
3.
R111 000
4.
R121 000
Clear my choice
Question 3
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Question 3:
Which one of the following statements is correct with regards to IFRS15, Revenue with
contracts from customers?
1.
For goods to be separately identifiable, it includes not integrating the goods or services with
other goods into a bundle providing a combined output.
2.
When the amount of consideration paid under one contract is independent on the price or
performance under another contract, then the contract can be combined
3.
A series of distinct goods or services that are substantially the same and that have the same
pattern of transfer to the customers is not considered a performance obligation.
4.
One of the conditions whereby a contract can be modified is when the scope of the contract
increases because of the additional promised goods or services that are similar.
, Clear my choice
Question 4
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Use the following information to answer question 4 and 5:
On 25 May 2023 Stepstone Ltd invoiced goods sold at a selling price of R195 000 (fair value,
after the discount has been taken into account) to Customer X on credit. In terms of
Stepstone’s credit policy, a discount of 2,5% is granted to its debtors, provided they pay
within 10 days after the date of sale. Based on historical information Stepstone Ltd
determines that a majority of its customers pay within ten days of sale. Customer X gains
control of the goods on 26 May 2023. No impairment losses or credit losses were expected.
Customer X pays 50% of the amount on 2 June 2023 and the remainder on the 5 June 2023.
REQUIRED:
Question 4:
Based on the information provided above, the settlement discount amount is?
1.
R4 875
2.
R48 750
3.
R5 000
4.
R50 000
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Question 5
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Question 5:
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