A contract modification always results in a new contract if the modification adds distinct goods or services at a price that reflects their stand-alone selling price. A. True B. False
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- Does contract modification always result in a new contract if the modification adds distinct goods or services at a price that reflects their stand-alone selling price.If a contract modification adds distinct goods or services and the contract price increases by an amount that reflects the stand-alone selling price of the added goods or services, then the contract modification should be accounted for By cumulative catch-up method. By prospective method. As a new separate contract. None of these choices.When a contract includes an option to buy additional goods or services, when does that option give rise to a performance obligation?
- 1."A sale of Goods Contract once made can never come to an end".Discuss the above statement with relevant examples.Which of the following should be avoided in a contract if cost certainty is important? Cost-of-living clauses Gainsharing clauses Profit sharing plans Piece-rate pay plansTRUE or FALSE. A distinct good or service can be described as Not interrelated with other goods or services in the contract (T/F) Highly dependent on another service in a contract (T/F) Can be used on its own or in combination with other goods or services (T/F)
- A contract to sell is the same as a conditional contract of sale. Do you agree? Explain your answer.Describe the difference between the forward price and the value of a forward contract?The standalone selling price of a performance obligation in a contract with a customer may not be directly observable. Alternatives for estimating the standalone selling price include Estimation of the Price in the Seller's Market Residual Approach Estimation of the Pricein the Seller's Market Yes Residual Approach Yes Estimation of the Pricein the Seller's Market No Residual Approach Yes Estimation of the Pricein the Seller's Market Yes Residual Approach No Estimation of the Pricein the Seller's Market No Residual Approach No
- Which of the following arises when the seller's right to consideration from a customer is conditional upon something other than the passage of time? A receivable A contract asset A contract liability None of these choicesThe contract of sale is a consensual contract. a. True b. FalseWhat Is Fixed-Price Contract with Redetermination?