Which of the Following Statements Is Not Correct

question 9

Multiple Choice

Which of the following statements is not correct?

• A) Contract in progress can legitimately represent large amounts.
• B) Contract in progress measures the amount of resources consumed in realizing all or part of a long-term contract but for which no invoicing has been issued to the customer.
• C) As soon as an invoice is issued,all corresponding resources are carried,as depreciation expense,to the income statement.
• D) If invoicing on contract takes place,for example,every four months,up to the cost of four months of production may be listed under contract in progress.

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Definitions:

Good Faith

A legal principle that emphasizes honesty, fairness, and integrity in the fulfillment of contractual and legal obligations.

Sale of Goods

A transaction involving the transfer of ownership of tangible personal property from a seller to a buyer for a price.

Tangible Personal Property

Physical items that can be owned and have value, such as furniture, jewelry, and vehicles.

Consideration

Something of value exchanged between parties in a contract that induces them to enter into the agreement.