In Selecting an Accounting Method for a Newly Contracted Long-Term

question 60

Multiple Choice

In selecting an accounting method for a newly contracted long-term construction project under private entity GAAP, the principal factor to be considered should be

• A)the terms of payment in the contract.
• B)the degree to which a reliable estimate of the costs to complete and extent of progress toward completion is practicable.
• C)the method commonly used by the contractor to account for other long-term construction contracts.
• D)the inherent nature of the contractor's technical facilities used in construction.

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Definitions:

Formal Operational Stage

An advanced stage in cognitive development, according to Piaget, marked by the ability to think logically about abstract propositions and hypothetical situations.

Conservation

The cognitive ability to understand that quantities remain consistent even when their shape or appearance changes, typically developing in the concrete operational stage of cognitive development.

Conservation of Volume

A cognitive development concept stating that a substance's volume remains unchanged even when its appearance changes, understood by children during the concrete operational stage according to Piaget.

Transitional Stage

A developmental phase where an individual moves from one significant stage to another, often involving substantial changes in behavior or role.