The Provision for a Loss on an Unprofitable Contract May

question 67

True/False

The provision for a loss on an unprofitable contract may be combined with the Construction in Process account balance under percentage-of-completion but not cost-recovery.

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Definitions:

Accommodation Maker

A person who signs a loan agreement as a guarantor without receiving any benefits from the loan.

Primary Liability

The obligation to be the first or main party responsible for payment or performance under a legal instrument, such as a loan or contract.

Accommodation Indorser

A person who signs a negotiable instrument on behalf of another without receiving a direct benefit, aiming to provide additional confidence to the payee.

Certify a Check

The act of a bank confirming that there are sufficient funds in the account of the drawer of a check and that it is legitimate, essentially guaranteeing payment.