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:

Market Outcomes

The results or final state of market processes, including price and quantity determined by supply and demand forces.

Price Floor

A minimum price set by the government or a regulatory body, below which a good or service cannot be sold in the market.

Compact Discs

Optical discs used to store digital data, primarily known for storing music recordings in a digitally encoded format.

Surplus

A condition in which the amount of a good offered for sale by producers is greater than the amount that buyers will purchase at the existing price. A decline in price would eliminate the surplus.