i. Define the term contract. ii. State the objectives of Contract costing Identify types of contracts Prepare simple contract accounts to show calculations for profit and loss on contracts Compute the profit on a long term contract Explain the treatment of contract losses in the accounting system iii. iv. V. VI.

i. Define the term contract. ii. State the objectives of Contract costing Identify types of contracts Prepare simple contract accounts to show calculations for profit and loss on contracts Compute the profit on a long term contract Explain the treatment of contract losses in the accounting system iii. iv. V. VI.

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

See similar textbooks

Similar questions

A company should recognize revenue when a. the revenue is earned b. die contract is signed c. the seller satisfies the performance obligation d. the consideration is received
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.
Topic: REVENUE FROM CONTRACTS WITH CUSTOMERS Requirements: a. Identify the performance obligations in the contracts. b. How should the entity recognize revenue from the contract? (State also the timing of revenue recognition for each identified performance obligation.)
When a contract contains more than one performance obligation, the seller allocates the transaction price to each performance obligation in proportion to the relative stand-alone selling prices of those goods and services. according to the standard prices for the goods and any balance remaining is allocated to services. according to the amount of labor involved with each part of the contract. according to none of these choices.
For contracts which are very near to completion, the profit is ascertained by the formula- a.Estimated profit x work certified/contract price b.Estimated profit x work certified/contract price x cash received/work certified c.Estimated profit x work certified/contract price x cost of work/total cost to date d.2/3 x Notional profit x cash received/work certified.
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
Partial satisfaction of a multiple performance obligation is reported on the balance sheet asa. contract liability.b. receivable.c. contract asset.d. unearned service revenue
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…
All of the following accounts are impliedly contained in the account "Construction in Progress” except: A. Progress Billings to date B. Costs incurred to date C. Contract Revenue to date D. Gross Profit to date S1: Zero Profit Method in revenue recognition principle recognized income upon the completion a construction contract S2: 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
If the outcome of a long-term contract can be measured reliably, the preferred accounting method under both IFRS and US GAAP is: A . the cost recovery method.
The cost-plus approach: a. refers to contracts that are modified from their original terms during the course of the contract. b. refers to contracts where the contractor is not expected to recover all costs incurred in completing the project. c. is not allowed under ASC Topic 606 guidance for revenue recognition. d. uses an assumed reasonable profit margin to determine the stand-alone price.
Question. Prepare a partial balance sheet to indicate how the above contract information would be reported. Ayayai uses the completed-contract method.