A _____ Contract Should Be Used in Cases Where the Parties

question 51

Multiple Choice

A _____ contract should be used in cases where the parties cannot accurately predict labor or material costs and quantities to be used prior to the execution of the purchase agreement.

• A)fixed-price with escalation
• B)firm fixed price
• C)cost sharing
• D)cost-based
• E)fixed-price with redetermination

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Definitions:

Prepared

The state of being made ready in advance for a specific purpose or event.

Adjusted Trial Balance

A compilation of all accounts along with their adjusted balances, employed for the creation of financial reports.

Adjusting Entries

Journal entries made at the end of an accounting period to update the accounts and ensure that the reported financial statements are accurate and complete.

Net Income

The total earnings of a company after subtracting all expenses, including taxes and costs, from its total revenues.