Contingency Reserves Require a Construction Company to Hold Back Some

question 15

True/False

Contingency reserves require a construction company to hold back some funds in an account just in case something happens that increases the overall project cost.

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Definitions:

Purchased Materials

Raw materials and components that are bought by a company from external suppliers for use in the production process.

Manufacturing Department

A division within a company that is focused on the production of goods through the combination of human labor, machinery, and raw materials.

Advertising Costs

Expenditures related to the promotion of products or services, which can include various forms of media advertisement, promotional materials, and online ads.

Period Costs

Expenses that are not directly tied to the production process and are expensed in the accounting period in which they are incurred.