Quizno Contracting Would Like to Utilize the Percentage of Completion

question 90

Multiple Choice

Quizno Contracting would like to utilize the percentage of completion method to recognize a building under construction for Balto Veterinary.However,the accountant is not sure whether Quizno Contracting is meeting GAAP expectations.It is appropriate for Quizno Contracting to apply the percentage of completion method EXCEPT when

• A)progress measures are dependable.
• B)contract obligations are precise and clear.
• C)the buyer has agreed to use the completed contract method of revenue recognition.
• D)both buyer and seller are expected to meet their obligations.
• E)little or no uncertainty exists regarding payment by the buyer.

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Definitions:

Labor Shortages

Labor shortages occur when employers have difficulty filling positions due to a lack of available, qualified candidates.

Equilibrium Wage Rates

The wage rate at which the quantity of labor demanded by employers equals the quantity of labor supplied by workers.

Strike

The withholding of labor services by an organized group of workers (a labor union).

Exclusive Union

A labor union that only represents workers from a particular company or industry, often having restrictive membership criteria.