A security contract entered into for a period of 3 years was revoked because of an impled flaw in the contract. The court ruled that the total contract price had to be paid The contract price received by the recipient should be treated as AI 1 Capital because it was received in a lump sum 8 11 Assessable income because it was an amount received to replace loss of earnings CI 1 A windtall gain becauso the company was not expecting the payment D I 1 An exempt income because no services were provided

A security contract entered into for a period of 3 years was revoked because of an impled flaw in the contract. The court ruled that the total contract price had to be paid The contract price received by the recipient should be treated as AI 1 Capital because it was received in a lump sum 8 11 Assessable income because it was an amount received to replace loss of earnings CI 1 A windtall gain becauso the company was not expecting the payment D I 1 An exempt income because no services were provided

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Under the completed-contract method, Question 16 options: a revenue, cost, and gross profit are recognized at the time the contract is completed. b revenue and cost are recognized during the production cycle, but gross profit recognition is deferred until the contract is completed. c revenue, cost, and gross profit are recognized during the production cycle. d None of these answers are correct.
A long-term liability is one that the company: Select one: a. Has owed for over one year. b. Has owed for over five years. c. Will not pay off for at least over five years d. Will not pay off for at least over one year. (Please Introduction and explanation with what is correct option and incorrect option why?) Please without plagiarism please will upvote
If a firm changes how they account for long-term contracts, what will be the proper accounting treatment? O This is considered a change in principle, so the firm will account for the change prospectively. O The firm will account for the change retrospectively. O This is considered a change in estimate, so the firm will account for the change prospectively. O Neither of these answer choices are correct.
Determine if this shall result in recognition of liabilities 5. signing of employment contract by a new employee a. yes b. no
A 114. Subject:- accounting
9. Which one of the following is not a condition for a valid contract? A. There must be no known reasons to prevent its completion. B. There must be at least two competent and identifiable parties. C. It must involve the transfer of a specified amount of cash. D. The terms and conditions must be specified.
A company incurred costs to fulfill a contract that has a four year life. The costs are a direct result of the contract and would not have been incurred had the contract not existed. how should the costs to fulfill the contract be accounted for?
15 Under physical capital maintenance assumption, a profit is earned only if the physical operating capability of the entity at the end of the accounting period is _____________ its physical operating capability at the start of the period, after adjusting for any amounts contributed by or distributed to owners during the period. a. Equal to b. Less than c. None of the given options d. Greater than
Statement I: In case of doubt, a contract purporting to be a sale with right of repurchase is construed as an assignment of rights. Statement II: The creditors of the vendor cannot make use of the right of redemption against the vendee until after exhausting the property of the vendor. Only Statement I is true. Only Statement II is true. Both statements are true. Both statements are false.
True or False 6. Entities may apply a simplified approach when recognizing impairment losses on trade receivables7. When there is a significant increase in the credit risk of a financial asset since its initial recognition but there is no objective evidence of impairment, interest revenue is computed on the net carrying amount of the financial asset (i.e. gross carrying amount less loss allowance)8. an entity recognizes impairment gain when there is an improvement in the credit quality of a previously impaired financial asset9.According to IFRS 9, expected credit losses are weighted average of credit losses with the respective risks of a default occurring as the weights10. a financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occured
For contracts which are very near to completion, the profit is ascertained by the formula- a.Estimated profit x work certified/contract price b.Estimated profit x work certified/contract price x cash received/work certified c.Estimated profit x work certified/contract price x cost of work/total cost to date d.2/3 x Notional profit x cash received/work certified.