Determine the progress toward completion cost-true or false

Reference no: EM132783685

Tell whether the following statements are True or False.

Question 1. Companies must use the percentage-of-completion (overtime) method when estimates progresses toward completion are reasonably dependable.

Question 2. The most popular input measure used to determine the progress toward completion is the cost-to-cost basis.

Question 3. lf the difference between the Construction in Process and the Billings on Construction in Process account balances is a debit, the difference is reported as a current asset.

Question 4. The Construction in Process account includes only construction costs under the percentage-of-completion method (overtime).

Question 5. Udder the cost recovery (point in time) method, companies recognize revenue and costs only when the contract is completed.

Question 6. The principal advantage of the cost recovery (point-in-time) method is that reported revenue reflects final results rather than estimates.

Question 7. Companies must recognize a loss on an unprofitable contract under the percentage-of-completion method (overtime) but not the cost recovery (point-in-time) method.

Question 8. A loss in the current period on a profitable contract must be recognized under both the percentage-of-completion (overtime) and cost recovery (point-in-time) method.

Question 9. Under the completion-of-production basis, companies recognize revenue when agricultural crops are harvested since the sales price is reasonably assured and no significant costs are involved in product distribution.

Question 10. The provision for a loss on an unprofitable contract may be combined with the Construction in Process account balance under percentage-of-completion (overtime) but not cost recovery (point-in-time) method.

Reference no: EM132783685

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