Which Accounting Method Is Permitted Under ASPE for Construction Contracts

question 43

Multiple Choice

Which accounting method is permitted under ASPE for construction contracts in limited circumstances?

• A)An accounting method that recognizes revenue and expenses on a cash basis.
• B)An accounting method that recognizes revenue and expenses only after it is completed.
• C)An accounting method that recognizes costs as incurred and an amount of revenue equal to the costs that are expected to be recovered on the contract.
• D)An accounting method that recognizes revenue and expenses based on the fair value of the contract.

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Definitions:

Interval Data

Data measured along a scale, in which each point is placed at a specific distance from a reference point, allowing for meaningful comparisons between data points.

Nominal Data

Data categorized into discrete groups or categories that cannot be ordered or ranked with respect to one another.

Ordinal Data

Ordinal data is a type of categorical data with a set order or scale to the possible values, but without a consistent difference between each value.

Quantitative Data

This refers to numerical data that can be measured and quantified, representing quantities, amounts, or levels.