Under ASPE, When Selecting an Accounting Method for a Newly

question 114

Multiple Choice

Under ASPE, when selecting an accounting method for a newly contracted long-term construction project, the principal factor to be considered should be

• A) the terms of payment in the contract.
• B) the degree to which a reliable estimate of the costs to complete and extent of progress toward completion can be made.
• C) the method commonly used by the contractor to account for other long-term construction contracts.
• D) the inherent nature of the contractor's technical facilities used in construction.

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Definitions:

Standard Deviation

A gauge for the extent of variability or scatter among a group of numbers, highlighting the deviation of these values from their average.

Mean

The average of a set of numerical values, calculated by summing them together and then dividing by the number of observations.

Standard Normal

A normal distribution with a mean of 0 and a standard deviation of 1.

Random Variable

A random variable represents numerical outcomes of random phenomena or experiments, varying in value based on the outcomes of the process.