Which of the Following Is Not True About Accounting for Long-Term

question 237

Multiple Choice

Which of the following is not true about accounting for long-term construction contracts?

• A) Long-term construction contracts could show a contract asset or contract liability, depending on the relation between construction in progress and billings.
• B) Billings on contracts in progress is a contra account to accounts receivable.
• C) Gross profit is debited to construction in progress.
• D) When a customer is billed for payment due, billings on contracts in progress is credited at the same time accounts receivable is debited.

Analyze the effects of actual overhead and labor hours differing from estimated amounts on the application of manufacturing overhead.

Compute total manufacturing cost and cost of goods sold for specific jobs under a job-order costing system.

Evaluate the decision-making implications of overhead application rates in pricing and inventory valuation.

Understand the concept and application of job-order costing in manufacturing environments.

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Definitions:

Sarbanes-Oxley Act

A United States federal law that established auditing and financial regulations for public companies.

Accounting Scandals

Incidents involving deliberate manipulation of financial statements or other serious misconduct by companies or individuals within them.

Ethical Norms

Accepted standards of behavior or moral principles guiding individual or group actions in various contexts.

Reputation

The widespread belief about the characteristics or qualities of a person, organization, or thing, which can influence public opinion and behavior.