Unrestricted Grant Revenues with a Time Requirement Should Be Recognized

question 43

Multiple Choice

Unrestricted grant revenues with a time requirement should be recognized

• A) when the award is announced.
• B) when the cash is received.
• C) in the period in which the grant is required to be used.
• D) when expenditures are recognized on grant-related activities.

Calculate the value of equity in a firm based on its assets and liabilities.

Understand the impact of the risk-free rate and market return expectations on option values.

Calculate total intrinsic value and market value of options.

Analyze the effect of stock price volatility on option strategies.

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Definitions:

Time Period Assumption

an accounting principle that divides an enterprise's life into small periods of time for reporting and analysis purposes.

Economic Life

The expected period over which an asset remains useful to the owner or until it can generate economic benefits.

Artificial Time Periods

Divisions of time, not naturally occurring, created for the purpose of financial reporting, budgeting, or project scheduling.

Economic Entity Assumption

An accounting principle that treats a company as a separate entity from its owners or shareholders for financial reporting purposes.