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.

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.

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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Concept explainers

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.

Question

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.

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The accrual of restructuring costs creates obligations (liabilities) referred to as exit or disposal cost obligations.Required:1. Obtain the relevant authoritative literature on exit or disposal cost obligations using the FASB AccountingStandards Codification. You might gain access at the FASB website (www.fasb.org). What is the Codification topic number that addresses this issue?
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