Answered: 15. contracts, contracts, and contracts…

15. contracts, contracts, and contracts are the contract types signed by the owner and the contractor after the bidding process. Fill in the blanks

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 21Q: What is the completed contract method?

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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

15.
_contracts,
contracts, and
_contracts are
the contract types signed by the owner and the contractor after the bidding process. Fill in the blanks

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#14 How should the balances of Progress Billings and Construction in Process be shown at reporting dates prior to the completion of a long-term contract? Question 14 options: a Net balance, as income from construction if credit balance, and loss from construction if debit balance b Progress Billings as deferred income, Construction in Progress as a deferred expense c Progress Billings as income, Construction in Process as inventory d Net balance, as a current asset if debit balance, and current liability if credit balance
When a bidder submits a proposal, does that act complete a contract? Explain.
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Which of the following is NOT the correct statements regarding forward contracts? I. contain a commitment to the owner, and are standardized. II. contain a commitment to the owner, and can be tailored to the desire of the owner. III. contain a right but not a commitment to the owner, and can be tailored to the desire of the owner. IV. contain a right but not a commitment to the owner, and are standardized. A. I, III, IV B. II, IV C. I, II, III D. I, II
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Question. Prepare a partial balance sheet to indicate how the above contract information would be reported. Ayayai uses the completed-contract method.
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…
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