Percentage of Completion is favored to be used under the following circumstances, except: a. Progress Billings is assured of collection b. Performance obligation can be reliably measured c. Contract Price is assured d. Contract Costs can be reliably estimated

Percentage of Completion is favored to be used under the following circumstances, except: a. Progress Billings is assured of collection b. Performance obligation can be reliably measured c. Contract Price is assured d. Contract Costs can be reliably estimated

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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

Percentage of Completion is favored to be used under the following circumstances, except:

a. Progress Billings is assured of collection

b. Performance obligation can be reliably measured

c. Contract Price is assured

d. Contract Costs can be reliably estimated

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