Performance of service.
Reasonable measurement of consideration.
Reasonable collectability.
100
When should KPI recognize expenses?
Generally, in the period they occur.
100
What is the purpose of a review engagement?
To assess the plausibility of the financial information.
To provide negative assurance.
100
How do you recognize KPI's self generated goodwill?
You don't. Because it does not meet the criteria of being an intangible asset. ASPE 3064.
200
If KPI collected payment for 2013 services, how should they be recorded in the financial 2012 year end?
Unearned revenue
200
If KPI has purchased and distributed fliers for an advertising campaign in 2012, for events in 2013 when should the expense be recognized?
In 2012, the period it occurred.
200
What is the difference between a review engagement and an audit?
Lower assurance.
Rely on analytical procedures and inquiry.
200
How should inventory be valued at year end?
Inventory should be revalued at lower of cost or net realizable value.
300
If KPI uses the cash basis when should revenue be recognized?
When it is collected.
300
Why should KPI's advertising expenses be recognized in the year they occur?
Because the future benefits of the outlay is indeterminable, therefore they cannot be recorded as a prepaid asset. ASPE 3064.
300
If KPI's review engagement is being performed for 2012. What should be done for 2011?
A review engagement needs to be performed for the prior year to have comparative numbers.
300
What are the two options regarding the recording of convertible debts under ASPE?
Under ASPE 3856,
1. Record the entire amount to liability
2. Determine the present value of the loan portion and allocate the difference to equity.
400
If KPI uses the accrual basis and a cheque of $100,000 was received on Jan 3 2013 for services rendered in December 2012. When should revenue be recognized?