AFM 191 Midterm questions with
complete solutions rated A+
Revenue Recognition Criteria (Goods) - correct answer ✔✔1) Risks and Rewards of
owning the good have been transferred to the buyer
2) Collection of payment is assured
3) Measurable consideration (putting price on transaction)
4) Performance
Revenue Recognition Criteria (Services) - correct answer ✔✔1) Collection of
payment is assured
2) Measurable consideration (putting price on transaction)
3) Performance
Current Asset Accounts - correct answer ✔✔cash, accounts receivable, inventory,
prepaid expenses
Long-Term Asset Accounts - correct answer ✔✔-Plant and equipment; land and
buildings
-Gross value- accumulated depreciation = net value
Current Liabilities Accounts - correct answer ✔✔Notes payable, accruals, a/p
long-term liabilities accounts - correct answer ✔✔a. Long-Term Accruals
b. Long-Term Financing Instruments
c. Other Liabilities
Shareholders Equity Accounts - correct answer ✔✔common stock and retained
earnings and revenue and expenses
