What are the two basic methods of accounting for longtermconstruction contracts? Indicate the circumstancesthat determine when one or the other of these methodsshould be used.

Q: t contract inception, PFRS 15 requires an entity to determine how the performance obligations…

A: Contract is a legal document or agreement between the two parties with their  mutual obligation.

Q: The following certain attributes present into a contract to determine whether the arrangements with…

A: Revenue can be recognized when there is a contract with the customers and performance obligation has…

Q: which are the terms and conditions for OPTION CONTRACT WITH SIMULTANEOUS TITLE CLOSING?

A: The option contract is an obligation to purchase the property in the future at a fixed predefined…

Q: What is the difference in Forward Contracts and Future Contracts

A:

Q: When is an estimated loss on a long-term contract recognized, both for contracts that recognize…

A: Revenue recognized point of long term contract: A long-term contract qualifies for revenue…

Q: Explain the importance of a contract in the revenue recognitionprocess.

A:

Q: What type of contract has been formed in this case?

A: Contracts are the agreements between two parties. It gives the  option to buy,sell, lend etc. It…

Q: Briefly explain the conditions when a contract modification shall be accounted for as a separate…

A:

Q: Topic: REVENUE FROM CONTRACTS WITH CUSTOMERS   Requirements: a. Identify the performance…

A: The core principle of IFRS 15 is that revenue is recognised when the goods or services are…

Q: If the down payment is non-refundable, how much is the contract liability to be initially recorded?

A: Contract liability that is to be recorded initially can be calculated by adding the down payment…

Q: The present worth of the two contracts is determined to be $

A: Present worth of a contract is the value it possess in current period by considering the discounted…

Q: Explain and illustrate types of Musharakah contracts

A: Musharakah Contracts: In Islamic Accounting it is a type of contract that is formed between two…

Q: For what reasons should the percentage-of-completionmethod be used over the completed-contract…

A: Completed contract method: In this method the revenue and profit are recognized only after the…

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: Hedging of positions and portfolios is accomplished via the use of both kinds of contracts.

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Define the contract liabilities.

A: Liability: Liabilities include the claims of the creditors on the assets of the business. The…

Q: What are the types of agreement related to sale-leaseback agreement?

A: Sale and Leaseback Agreement is a kind of financial transaction. This is a situation that arises…

Q: What are the different types of future contracts? Explain each.

A: Future contract is referred to as the contract, which is made between the two parties where the…

Q: When the outcome of a construction contract cannot be estimated reliably, how shall contract revenue…

A: when the outcome of a construction contract can be estimated reliably, contract revenue and contract…

Q: When a bidder submits a proposal, does that act complete a contract? Explain.

A: For a stated cost, it is necessary to submit a bid to do the venture. Even the staff and machinery…

Q: Define contract laibilities.

A: Liabilities: The claims creditors have over assets or resources of a company are referred to as…

Q: Is variable consideration included in the calculation of a contract’s transaction price? If so, how…

A:

Q: Identify the best and worst types of contract on the basis of payment

A: Contract is referred to as the legal bind of an agreement, which used to define as well as govern…

Q: How does a seller allocate a transaction price to a contract’s performance obligations?

A: Transaction price: Transaction price is the amount of consideration that is estimated by the company…

Q: What is an onerous contract? Give two examples of an onerous contract.

A: When the cost of carrying out unavoidable obligations exceeds the benefit expected to be received…

Q: __ is a contract that involves compensation for specific potential future losses in exchange for…

A: Step 1 Currency swap forward contracts are frequently used by companies with international market…

Q: What two methods are identified in the Codification as appropriate in accounting for long-term…

A: Long term Construction Contract Construction contract are in different type in accordance with need…

Q: Which type of contract contingency is most likely to A O Financing contingency. BO Partner approval…

A: The right answer  is  option a  Financing contingency

Q: Which of the following is not a condition in identifying the contract with the customer as per IFRS…

A: As IFRS 15 - Revenue from Contracts with Customers, The standard provides a single, principles based…

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: What are the two basic methods of accounting for long term construction contracts? Indicate the…

A: Explain the two basic methods of accounting for long term construction contracts: The two basic…

Q: If the outcome of a long-term contract can be measured reliably, the preferred accounting method…

A: Long term contracts are those contracts which are related to construction of building. Usually long…

Q: When it is probable that total contract costs will exceed total contract revenue, how shall it be…

A: Contract account is prepared when the work to be done take substantial time to make (generally more…

Q: Compare and contrast the istijrar contract with its closest conventional contract. What are the main…

A: Istijrar refers to the purchase of commodities in varying quantities on a regular basis. In Islamic…

Q: Describe the conditions when contract assets and liabilitiesare recognized and presented in…

A: Contract assets: It is the right of the firm to receive payment for the goods transferred or…

Q: What are the two things that happened in the sale-leaseback agreement?

A: Sale and Leaseback Agreement is a kind of financial transaction. This is a situation that arises…

Q: Identify the two recognized lease accounting methodsfor lessees and distinguish between them.

A:

Q: Describe the lessee's accounting for sale-leaseback transactions.

A: Meaning:

Q: The contract in which the buyer has the right but not an obligation to buy or sell and underlying…

A: Option contract refers to the contract in which buyer or seller is having right but not an…

Q: An antenuptial contract must be notarially executed to be valid between the contracting parties.…

A: A contract entered into by a couple before their marriage, and restricting to retain their assets…

Q: Which are the terms and condition on CONTRACT FOR FUTURE DEED?

A: Contract for future deed is an agreement which provides for the finance by the seller for the sale…

Q: If a contract modification does not create a separate contract, it is accounted for using either a…

A: The correct answer is “either a cumulative catch-up adjustment or a prospective approach”.

Q: How might the definition of “probable” affect determining whether a contract exists under IFRS as…

A: GAAP: GAAP stands for “Generally Accepted Accounting Principles”. It provides the accounting rules…

Q: Give the FIRST exception to the general rule that: If the consideration of the contract consists…

A: If the consideration of the contract consists partly in money and partly in another thing, the…

Q: what kind of account is contract fees

A: Definition: Revenues: Revenues are earnings from the operations of a business. The operating…

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.