What should be the answer??
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According to me No effect is correct because the cash was already received when the tickets were sold in advance, so recognizing the revenue does not impact cash flow from operations in the year it is recognized.
can you please explain it further with some example?? I’m unable to pick this !!
No effect as it is Unearned revenue that is received in advance. It’s a liability, it was received in 2012 and would come in CFO. The question is saying it will recognize it in the next year i.e. 2013. So cash was already received in the prior year, in 2013 there will be No effect in the CFO.
Acha thik hai, kuch din pehle he similar transaction ka 1 question post kiye the usme decrease in unearned revenue ka tum khud bola tha ki Cash received from customers me se less hoga, and iss question me v same ho raha hai na like 2012 me record kiye unearned revenue and 2013 me wo reduce hoga, so isme Cash received from customers me less nhi hoga?? and less hoga to CFO affected kyu nhi??
wo Question and answer v post kr de raha hu reference k liye!!
The Question, see decrease in unearned revenue & answer is C,
Tushar, here is your answer and look at your explanation for decrease in unearned revenue, isme v to same case hai means pehle he cash mil gya and current year me recognise krega to reduce ho gya, so iss question me subtract hoga bol raha hai, Cash received from customers se less hoga to CFO affect nhi hoga?? Give me the proper logic, both the question contradicting each other that’s why I’m confused !!
The earlier one mein my logic was wrong na…You corrected me there only. Give me some time, will get back to ya.
your logic was wrong regarding that writedown transaction.
galat logic ho to v answer to wahi hai na ki subtract hoga, and subtract krne se to CFO me effect ayega he!!
iss sal recognise kiye I/S me to NI overstated hai so usko remove krne se to CFO me decrease hoga!!
Yes, I looked into it. Our logic for the earlier question was correct. I am sharing the solution of it below, that you shared. It’s written their the process. There’s a problem in our understanding for this queztion.
Here is the solution of the previous one… See
I know what was the answer you see, calculation of cash received from customers requires subtraction in any decrease in unearned revenue, ultimately this will affect CFO. so why ans is no effect?
ans of this question is not so elaborated,
Answer B
PIA received the cash in 2012 when it recorded the unearned revenue and it was a part of the
cash from operations in that year. In 2013, the revenue is earned, but there is no cash
exchanged and hence no effect of the cash from operations, ignoring taxes.
see, now tell me both of these aren’t contradicting each other, one says cash received from custumers will be reduced by the decrease in unearned revenue which will ultimately have an impact on CFO, and this question same case recorded unearned revenue in 2012 and in 2013 that will be recognised means unearned revenue will be decrease and this answer says there will be no impact!!
Confusing !!
when there is no cash transaction this year and we are recognising this as revenue of this year, that amount should be deducted from NI/cash received from customers. I’m stuck at this point!!
Yes i know what you’re trying to say. Yes they’re contradicting each other. According to the previous question, the answer should be increase here, but it is saying B. Acc t the explanation in the solution, it is saying the same thing that, 2012 mein ho chuka isliye 2013 mein cash involved nhi h. So agar aisa hai toh last question mein cash mein kyu involve kiya. I’m confused too, let’s try to take help from chatgpt. But still I don’t think so it will beable to elaborate properly. Upvoting this question .
Please share the soultion of this question. Let’s check that, actually my revision of FSA is in progress. Let’s look into the solution.
nahi bhai increase kyu hoga, increase to 2012 wale me karenge and current year me decrease hoga because wo pehle he le chuke and usko iss sal recognise kr rhe means iss sal k NI me include kiye but wo iss sal nhi mila, pehle he mil chuka iss liye cash received me se less hoga so other thing remain same
NI-unearned revenue recognised=CFO. or
NI- decrease in unearned revenue=CFO
opt A, decrease should be the answer.
Sanjay sir se iska explanation mil jata to better hota, but don’t know how to ask him directly, jaise telegram channel me sir doubts ka audio upload kr dete hai same iss doubt ka v sir ka explanation mil jata to help ho jata.
Yes decrease, increase likh diya galti se 2012 wala. Telegram pr sir ko personal dm kro na. Waha se sir gives solutions.
Yes decrease, increase likh diya galti se 2012 wala. Telegram pr sir ko personal dm kro na. Waha se sir gives solutions.