The Completed-Contract Method for Recognising Profit on a Construction Contract

question 17

Multiple Choice

The completed-contract method for recognising profit on a construction contract is a conservative method of profit recognition because:

• A) it results in construction costs being written-off as they are incurred
• B) it does not anticipate profit
• C) it recognises progress billings as revenue when the cash is received
• D) all of the above

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Definitions:

Fundamental Attribution Error

The bias of attributing others' actions more to their character than to external factors, overlooking the influence of situational aspects.

Dispositional Traits

Enduring personality characteristics that influence behavior across different situations and over time.

False Consensus Effect

The cognitive bias whereby people tend to overestimate how much others agree with their own beliefs, attitudes, or behaviors.

Stimulus Overload Effect

A phenomenon where individuals experience stress or cognitive overload due to an excessive amount of stimuli to process.