Solve The percentage of completion method isprimarily used in?a) Long-term construction contractsb) Service industriesc) Retail salesd) Manufacturing

Explanation of Percentage of Completion Method: This is an accounting method used to recognize…

Answered: The percentage of completion method is…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter8: Revenue Recognition, Receivables, And Advances From Customers

Section: Chapter Questions

Problem 3Q

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If the Construction in Progress account is greater than the Contract Billings, the excess is treated as * A. current liability B. current asset C. loss D.income
Which of the following costs shall from part of contract costs of long-term construction contract? a. General administration costs for which reimbursement is not specified in the contract b. Research and development costs for which reimbursement is not specified in the contract c. Construction overheads including costs such as the preparation and processing of construction personnel payroll. d. Selling costs such as broker’s commission
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In any construction project, the total bill to the owner must equal a. Gross profit b. Net profit c. Project contract amount d. General overhead
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
Define each of the following terms: f. Full capacity sales; target fixed assets to sales ratio; required level offixed assets
Which of the following applies conservatism to the financial statements of a full cost company? Group of answer choices A. Use of the entire country as the cost center B. Full cost ceiling test C. Capitalization of exploratory dry holes D. Exclusion of costs from the amortization pool
If a firm has already paid an expense or is obligated to pay one in the future, regardless of whether a particular project is undertaken, that expense is a(n) Multiple Choice. committed cost complementary cost. obligated cost sunk cost
Which of the following is a product cost? A) Sales commissions B) CEO's salary C) Delivery van depreciation D) Depreciation on production equipment
How is the total payment under a unit-price contract determined? When is such a contract likely to be more economical for the owner than a lump-sum contract? For the contractor? Explain.
Define the term Annual operating cost:?

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The percentage of completion method is primarily used in ? a) Long-term construction contracts b) Service industries c) Retail sales d) Manufacturing