Which of the following shall be excluded in the contract costs of a construction contract? * A. Costs that are directly attributable to contract activity in general and can be allocated to the contract B. Costs that directly relate to the specific contract C. Such other costs as are specifically chargeable to the customer under the terms of the contract D. Selling costs such as advertisement expense or commissions of real estate agents or brokers
Which of the following shall be excluded in the contract costs of a construction contract? * A. Costs that are directly attributable to contract activity in general and can be allocated to the contract B. Costs that directly relate to the specific contract C. Such other costs as are specifically chargeable to the customer under the terms of the contract D. Selling costs such as advertisement expense or commissions of real estate agents or brokers
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Which of the following shall be excluded in the contract costs of a construction contract? *
A. Costs that are directly attributable to contract activity in general and can be allocated to the contract
B. Costs that directly relate to the specific contract
C. Such other costs as are specifically chargeable to the customer under the terms of the contract
D. Selling costs such as advertisement expense or commissions of real estate agents or brokers
Percentage of Completion is favored to be used under the following circumstances, except
A. Progress Billings is assured of collection
B. Contract Price is assured
C. Performance obligation can be reliably
measured
D. Contract Costs can be reliably estimated
S1: Cost plus contract is a contract used on long term construction contracts in which the contractor agrees to a contract price that is fixed, either at the inception or at a fixed rate per unit of output, which in some cases may be subject to cost escalation clauses.S2: Variable contract is a construction contract in which the contractor
is reimbursed for allowable or otherwise defined costs, plus a percentage of these costs or a fixed fee *
A. Both are true
B. S2 True; S1 False
C. Both are false
D. S1True; S2 False
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