1. All of the following accounts are impliedly contained in the account Construction in Progress except: A.  Costs incurred to date B. Contract Revenue to date C. Gross Profit to date D. Progress Billings to date   2. S1: Zero Profit Method in revenue recognition principle recognizes income upon the completion a construction contractS2: A contract asset exists when Contract revenue to date is less than progress billings to date. A. Both are true B. Both are false C. S1 True D. S2 True

Q: A method of reporting income that is used when collection can be made over a relatively long periods…

A: Income refers to the revenue which is earned through business from selling the goods and services.

Q: Which of the following statements regarding contracts is incorrect?a. Identifying the contract with…

A: Definition: Earnings: The bottom line of income statement which is the result of excess of earnings…

Q: Under the general rule of revenue recognition, revenue is recognized when Group of answer choices…

A: The revenue recognition principle says that we need to recognize the revenue at the time when goods…

Q: The revenue recognition principle dictates that revenue be recognized in the accounting period…

A: The revenuerve recognition principle states that every business organization should recognize the…

Q: The statement 'revenue is recognized in the accounting period in which the performance obligation is…

A: The revenue recognition principal state that the the revenue should be recognised in books when the…

Q: Which of the following costs shall from part of contract costs of long-term construction contract?…

A: Following is the answer to the given question

Q: The third step in the process for revenue recognitio

A: REVENUE RECOGNITION shows the transfer of promised goods or services in an amount that reflects how…

Q: Determine if this shall result in recognition of liabilities   4. Receipt of goods ordered from a…

A: The goods purchased on account increases the inventory and also increase the liability.

Q: All of the following accounts are impliedly contained in the account "Construction in Progress”…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Program revenues are reported in the bottom section of the statement a. True b. False

A: The statement of government wide net position reports the revenues such as program revenues, general…

Q: Which one of the following statement about encumbrance is correct? a. Encumbrances are equivalent to…

A: Encumbrances denote the estimated expenditures before the actual expenditure is occurred. It…

Q: Which one of the following accounts is an asset similar to work-in-process inventory? Group of…

A: An asset refers to the resource of the business that can be utilized for the purpose of revenue…

Q: All of the following accounts are impliedly contained in the account “Construction in Progress”…

A: Construction work in progress refers to the cost related to the work in progress of each incomplete…

Q: 1. Should the two contracts be combined for purposes of applying the five-step revenue recognition…

A:

Q: S1: Zero Profit Method in revenue recognition principle recognizes income upon the completion a…

A: S1: The Zero Profit Method of revenue recognition recognises income when a construction contract is…

Q: The firm recognizes an expense when the following condition(s) hold(s):   Select one: A. The…

A: Introduction:- Generally expenses should be recognized in the same period as the revenues relating…

Q: Direction: Choose the correct answer.  1. A provision is a. An event which is not recognized…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Before revenue can be recognized, the revenue recognition principle requires the _____. A. Product…

A: Revenue is the money earned by providing services or selling goods to customers. The Revenue…

Q: S1: The initial measurement under PFRS 17, is the sum of the fulfillment cash flows and the…

A: IFRS 17:-It is the standard which deals which insurance contract, here it make sure that entity…

Q: Which of the following is the account where the increases are recorded to the receivable side and…

A: Company sell products on credit and these selling create customers on credit so these are to be…

Q: In accounting for a long-term construction contract using the percentage of completion method, the…

A: Percentage of completion method requires reporting of revenue and expenses period by period basis.

Q: Any anticipated loss should be recognized * A.on a percentage basis during the contract period B.…

A: The amount of anticipated loss is calculated regardless of: (a) whether or not work on the contract…

Q: Unearned revenues are a. Earned and recorded as liabilities before they are received. O b. Earned…

A: 12. Unearned revenue is the revenue that is received by the company but not yet earned by the…

Q: On a classified balance sheet, wages payable is classified as: a.a current liability. b.a long-term…

A: Wages payable: Wages company should pay them to employees but not paid by the company.

Q: A. For some assets, straight-line depreciation is used for tax purposes while double-declining…

A: “Since you have posted a question with many sub-parts, we will solve three sub-parts for you. To get…

Q: 1. Record the preceding transactions in MSK's books assuming it recognizes revenue over time and…

A: Given: Estimation of factory building = $ 525,000

Q: When outcome of a construction contract is estimated reliably, contract revenue and contract costs…

A: Solution: As per IAS 11, "when the outcome of a construction contract can be estimated reliably,…

Q: The cost-plus approach:   a. refers to contracts that are modified from their original terms…

A: Cost plus contract means a contract in which buyer agrees to pay the  contractor all the Cost plus a…

Q: Statement II. The transaction price for the sale of the product with premium is recorded as a…

A: The answer has been mentioned below.

Q: Which of the following is sufficient to record the expense ?    a) Payment in the following period…

A: Expense- An expense refers to the cost that's employed in producing revenues in an exceedingly…

Q: When recognizing revenue, a company has a performance obligation when it agrees to a. perform a…

A: A performance obligation is satisfied when the company delivered goods or performed services to…

Q: For an SME, revenue shall arise on all of the following transactions and events except a. Sale of…

A: IAS 18 states that the revenue shall be aroused when the sale of goods or providing of service is…

Q: In light of your study of the main conditions mentioned in the definition, mention why are or are…

A: An asset is a resource with the financial worth that an individual, enterprise, or nation possesses…

Q: Which of the following shall be excluded in the contract costs of a construction contract? * A.…

A: Contract costs should comprise:(a) costs that relate directly to the specific contract;(b) costs…

Q: How much must be shown as current asset (cost of uncompleted contract in excess of billings) in the…

A: Current Assets are the group of assets held by the business or a company for the purpose of regular…

Q: ccording to IASB’s Conceptual framework for financial reporting which of the measurement bases above…

A: According to IASB'S Conceptual framework,  Measurement or reporting of the element in the financial…

Q: #14  How should the balances of Progress Billings and Construction in Process be shown at reporting…

A: Introduction: Progress billing is a form of invoicing that ensures a consistent payment schedule…

Q: In the following liabilities, the payee is known, however, the amount may have to be estimated.…

A: provision should be created for all the certain liabilities

Q: Under the completed-contract method,   Question 16 options: a revenue, cost, and gross profit are…

A: Under the completed-contract method,                     The total revenues, total costs incurred,…

Q: According to U.S. GAAP, when should revenue be recognized?a. When cash is received from the…

A: Revenue: It refers to money earned by the business from selling its goods and services to the…

Q: When is revenue recognized in the following situations?(a) Revenue from selling products, (b)…

A:

Q: The five steps in the revenue recognition process are: 1. Identify the contract(s) with customers. 2…

A:

Q: Assuming the requirements for recognizing revenue over time are met, the profit to be recognized in…

A: Under construction contract, the profit is recognised on the basis of the costs incurred during the…

Q: The FASB has established a Five-Step process to recognize revenue.  Which of the following is not…

A: FASB has given five step process for revenue recognition.That is accepted every where.

Q: For contracts which are very near to completion, the profit is ascertained by the formula-

A: Every contract takes 2 to 5 years to complete. Actual profit can be calculated at the end of…

Q: Explain the revenue recognition process when a performance obligation is satisfied over time…

A: Under the IFRS 15- Revenue from Contracts with Customers, a framework is set for revenue recognition…

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.