Cost Estimates at the End of the Second Year Indicate

question 72

Multiple Choice

Cost estimates at the end of the second year indicate a loss will result on completion of the entire contract. Which of the following statements is correct?

• A) Under the completed-contract method, the loss is not recognized until the year the construction is completed.
• B) Under the percentage-of-completion method, the gross profit recognized in the first year must not be changed.
• C) Under the completed-contract method, when the billings exceed the accumulated costs, the amount of the estimated loss is reported as a current liability.
• D) Under the completed-contract method, when the Construction in Process balance exceeds the billings, the estimated loss is added to the accumulated costs.

Understand the role and importance of emotional intelligence in sales performance.

Recognize the significance of sales territories and scheduling for effective sales management.

Demonstrate knowledge of the sales process, including qualifying accounts and handling sales calls.

Grasp the concepts of break-even analysis and sales territory analysis for decision-making.

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Definitions:

External Auditor

An independent party that reviews an organization's financial statements to ensure accuracy and compliance with accounting standards.

Net Income

The total earnings of a company after deducting all expenses, taxes, and losses from total revenue.

Balance Sheet

This details a business's financial condition by listing its assets, debts, and the equity of its shareholders on a specific date.

Economic Resources

Assets, natural resources, labor, and capital that can be used for the production of goods and services, fundamental to economic activity.