33. Entity A enter into a long-term contract to provide service. The outcome of the transaction can be estimated reliably and the progress on the contract can be measured with sufficient reliability. According to PPSAS, how should entity A recognize revenue from the contract?On a straight-line basis over the contract termBy reference to the stage of completion of the contract at the reporting dateFull recognition of contract price upon completion of the contractOnly to the extent of costs that are expected to be recovered.

Long term contract of service are those contracts in which there is an agreement between two parties…

Answered: 33. Entity A enter into a long-term…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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33. Entity A enter into a long-term contract to provide service. The outcome of the transaction can be estimated reliably and the progress on the contract can be measured with sufficient reliability. According to PPSAS, how should entity A recognize revenue from the contract?

1. On a straight-line basis over the contract term
2. By reference to the stage of completion of the contract at the reporting date
3. Full recognition of contract price upon completion of the contract
4. Only to the extent of costs that are expected to be recovered.

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