For a Construction Contract Where the Company Uses the Percentage

question 21

Multiple Choice

For a construction contract where the company uses the percentage of completion method and there is a change in the estimated total cost of the contract from 12 million to 13 million, the accountant should do the following:

• A)Use the average cost of 12.5 million.
• B)Compute the percentage completed using the new cost total if the company uses the cost ratio to estimate percentage completed.
• C)Use estimated costs determined at the beginning of the contract, not actual costs to date.
• D)Use retrospective treatment.

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Definitions:

Research Hypothesis

A statement predicting the nature of the relationship between two or more variables of interest in a study.

Null Hypothesis

A statement or assumption that indicates no statistical significance exists in a set of given observations, serving as the default position that there is no effect or difference.

Alternative Postulates

Hypotheses or statements made as alternatives to the main hypothesis, often used in contrasting experimental conditions.

Educated Guess

An assumption or prediction based on knowledge, experience, and reasoning, often used in the context of forming a hypothesis.