Which of the Following Statements Is Incorrect with Respect to Revenue

question 35

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) AASB 111 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 estimated.
• 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.
• E) E: All of the given answers.

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Definitions:

Finite Result

An outcome or solution that is fixed and definitive, with limitations in terms of size, number, or extent.

Discrete Variable

A variable that can take on a countable number of distinct values and cannot take on every value within its range.

Discrete Random Variable

A variable that can take on a countable number of distinct values, often associated with experiments that have a finite set of possible outcomes.

Discrete Random Variable

A variable that assumes a countable number of distinct values, with each value associated with a certain probability.