How do cost-plus-incentive contracts affect revenue recognition timing? • A. Include inception estimated incentives from B. Record base fee only . C. Add incentives when awarded • D. Recognize at contract completion

How do cost-plus-incentive contracts affect revenue recognition timing? • A. Include inception estimated incentives from B. Record base fee only . C. Add incentives when awarded • D. Recognize at contract completion

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 1MC: A company should recognize revenue when a. the revenue is earned b. die contract is signed c. the...

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How do cost-plus-incentive contracts affect
revenue recognition timing?
• A. Include
inception
estimated incentives from
B. Record base fee only
. C. Add incentives when awarded
• D. Recognize at contract completion

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How do cost-plus-incentive contracts affect revenge recognition timing?
Percentage of Completion is favored to be used under the following circumstances, except: a. Progress Billings is assured of collection b. Performance obligation can be reliably measured c. Contract Price is assured d. Contract Costs can be reliably estimated
Allocate a contract’s transaction price to multiple performance obligations.
A company should recognize revenue when a. the revenue is earned b. die contract is signed c. the seller satisfies the performance obligation d. the consideration is received
Which of the following should be avoided in a contract if cost certainty is important? Cost-of-living clauses Gainsharing clauses Profit sharing plans Piece-rate pay plans
Ac. When a transaction involves multiple performance obligations in a single transaction Select one : a . All revenue can be recognized once the product has been delivered and the service has been provided . b . The revenue must be deferred until the last performance obligation has been completed c . The performance obligations involve products but not services d . The seller must separate the revenue into two or more elements
Match the following challenges in revenue recognition with their corresponding aspects: A. Determining appropriate recognition criteria B. Estimating the fair value of variable considerations C. Identifying and allocating revenue to each performance obligation D. Monitoring and reassessing estimates over time 1. Matching with A: • Option: 2. Matching with B: Option: 3. Matching with C: • Option: 4. Matching with D: Option: ● Options: A) Determining appropriate recognition criteria B) Estimating the fair value of variable considerations C) Identifying and allocating revenue to each performance obligation D) Monitoring and reassessing estimates over time Choose the correct combination: 1. A-B, B-C, C-D, D-A 2. A-C, B-D, C-A, D-B 3. A-D, B-C, C-A, D-B 4. A-B, B-D, C-A, D-C
1. When outcome of a construction contract is estimated reliably, contract revenue and contract costs associated with the construction contract should be recognized using * A. cost recovery method B. percentage of completion method C.gross profit method D.zero profit method.
What is a characteristic of pay for performance? O Pays all providers the same amount O Creates incentives for meeting benchmarks O None of these O Allows providers to set their own reimbursement method
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