Homework Help is Here – Start Your Trial Now!
Business
Accounting
1) Percentage of Completion is favored to be used under the following circumstances, except A. Contract Costs can be reliably estimated B. Contract Price is assured C. Progress Billings is assured of collection D. Performance obligation can be reliably measured

1) Percentage of Completion is favored to be used under the following circumstances, except A. Contract Costs can be reliably estimated B. Contract Price is assured C. Progress Billings is assured of collection D. Performance obligation can be reliably measured

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

KINDLY ANSWER WITH EXPLANATIONS.

1) Percentage of Completion is favored to be used under the following circumstances, except A. Contract Costs can be reliably estimated B. Contract Price is assured C. Progress Billings is assured of collection D. Performance obligation can be reliably measured 2) S1: Cost plus contract is a contract used on long term construction contracts in which the contractor agrees to a contract price that is fixed, either at the inception or at a fixed rate per unit of output, which in some cases may be subject to cost escalation clauses. S2: Variable contract is a construction contract in which the contractor is reimbursed for allowable or otherwise defined costs, plus a percentage of these costs or a fixed fee. A. Both are true B. S1 True; S2 False C. Both are false D. S2 True; S1 False 3) Which of the following shall be excluded in the contract costs of a construction contract? A. Costs that directly relate to the specific contract B. Selling costs such as advertisement expense or commissions of real estate agents or brokers C. Costs that are directly attributable to contract activity in general and can be allocated to the contract D. Such other costs as are specifically chargeable to the customer under the terms of the contract 4) S1: Zero Profit Method in revenue recognition principle recognizes income upon the completion a construction contractS2: A contract asset exists when Contract revenue to date is less than progress billings to date A. S2 True B. Both are true C. Both are false D. S1 True 5) All of the following accounts are impliedly contained in the account "Construction in Progress" except A. Contract Revenue to date B. Gross Profit to date C. Progress Billings to date D. Costs incurred to date
Transcribed Image Text:1) Percentage of Completion is favored to be used under the following circumstances, except A. Contract Costs can be reliably estimated B. Contract Price is assured C. Progress Billings is assured of collection D. Performance obligation can be reliably measured 2) S1: Cost plus contract is a contract used on long term construction contracts in which the contractor agrees to a contract price that is fixed, either at the inception or at a fixed rate per unit of output, which in some cases may be subject to cost escalation clauses. S2: Variable contract is a construction contract in which the contractor is reimbursed for allowable or otherwise defined costs, plus a percentage of these costs or a fixed fee. A. Both are true B. S1 True; S2 False C. Both are false D. S2 True; S1 False 3) Which of the following shall be excluded in the contract costs of a construction contract? A. Costs that directly relate to the specific contract B. Selling costs such as advertisement expense or commissions of real estate agents or brokers C. Costs that are directly attributable to contract activity in general and can be allocated to the contract D. Such other costs as are specifically chargeable to the customer under the terms of the contract 4) S1: Zero Profit Method in revenue recognition principle recognizes income upon the completion a construction contractS2: A contract asset exists when Contract revenue to date is less than progress billings to date A. S2 True B. Both are true C. Both are false D. S1 True 5) All of the following accounts are impliedly contained in the account "Construction in Progress" except A. Contract Revenue to date B. Gross Profit to date C. Progress Billings to date D. Costs incurred to date
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Basic Accounting Terms
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS