In Accounting for a Long-Term Construction-Type Contract Using the Percentage-Of-Completion

question 5

Multiple Choice

In accounting for a long-term construction-type contract using the percentage-of-completion method, the gross profit recognized during the first year would be the estimated total gross profit from the contract, multiplied by the percentage of the costs incurred during the year to the

• A) total costs incurred to date.
• B) total estimated cost.
• C) unbilled portion of the contract price.
• D) total contract price.

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Definitions:

Statistical Test

A procedure that uses sample data to evaluate a hypothesis about a population parameter.

Interval Level

Interval level refers to a type of data measurement that includes meaningful, equal distances between values, but without a true zero point, allowing for the measurement of difference and the use of arithmetic operations.

Ratio Level

The highest level of measurement that describes data with a true zero point and equal intervals between values, allowing for a full range of descriptive and inferential statistical operations.

Statistical Test

A procedure for making inferences about the properties of a population, based on sample data.