Which of the Following Statements Is Incorrect with Respect to Revenue

question 24

Multiple Choice

Which of the following statements is incorrect with respect to revenue recognition of construction contracts?

• A)The percentage-of-completion method is to be applied for fixed price contracts if the recognition criteria are satisfied.
• B)IASB (2011) Revenue from Contracts with Customers requires individual construction contracts to be accounted for separately and the requirements of the standard to be applied separately to each contract.
• C)The percentage-of-completion method should be used, provided certain conditions are met that enable the outcome of the contract to be reliably measured.
• D)Percentage-of-completion method requires contract revenue to be matched with progress billings, resulting in the reporting of revenue, expenses and profit which can be attributed to the amount billed to customers.

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Definitions:

Spongy Bone

Spongy bone, also known as cancellous bone, is less dense bone that is found at the ends of long bones and in the inner layers of other bones, characterized by a porous structure.

Diaphysis

The shaft or central part of a long bone, typically cylindrical in shape and containing the marrow cavity.

Epiphyseal Lines

Remnants of the epiphyseal plate in long bones, signifying the end of bone growth in length.

Articular Cartilage

A soft, white substance that envelops the ends of bones at their joint intersections, minimizing friction and cushioning impacts.