(CMA Adapted, Dec 92 #18) the Mining Industry Frequently Recognizes

question 130

Multiple Choice

(CMA adapted, Dec 92 #18) The mining industry frequently recognizes revenue using the completion of production method.This method is acceptable under the revenue recognition principle because
$\begin{array}{ccc}\text { Sales prices are } & \text { Assets are } & \text { Production cost } \\\text { reasonably } & \text { readily } & \text { can be readily }\\\text { assured } & \text {realizable } & \text {determined }\end{array}$

• A)\(\begin{array}{lll}
• \text { Yes } & \text { Yes } & \text { No }
• \end{array}\)
• B)\(\begin{array}{lll}
• \text { Yes } & \text { No } & \text { Yes }
• \end{array}\)
• C)\(\begin{array}{lll}
• \text { No } & \text { Yes } & \text { No }
• \end{array}\)
• D) \(\text { No } \quad \text { No } \quad \text { Yes }\)
• E)\(\text { No } \quad \text { Yes } \quad \text { Yes }\)

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Definitions:

Net Income

The total earnings of a company after all expenses and taxes have been deducted from total revenue, indicating the company's profit.

Dividends

Dividends are payments made by a corporation to its shareholders, usually as a distribution of profits.

Contingent Consideration

An obligation to transfer additional assets or equity interests to the former owners of an acquired business if future events occur or conditions are met.

Business Combinations

Transactions or events in which an acquirer obtains control over one or more businesses.