Under the Completed Contract Method of Income Recognition on Long-Term

question 120

Multiple Choice

Under the completed contract method of income recognition on long-term construction contracts:

• A) The balance in the "Construction-in-Progress" account is reported on the balance sheet as a long-term asset until the date of completion.
• B) The accumulated amount in the "Construction-in-Progress" account is essentially the amount of cost of goods sold at completion date.
• C) Income is accumulated in the "Construction-in-Progress" account.
• D) "Construction-in-Progress" is reduced when billings are collected.

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Definitions:

Self-determination Theory

A theory of motivation that emphasizes the role of intrinsic motivation in driving human behavior and the importance of psychological needs for competence, autonomy, and relatedness.

Competence

The ability to do something successfully or efficiently, typically gained through experience or training.

Autonomy

The capacity to make an informed, uncoerced decision independently.

Hierarchy of Needs

A theory proposed by Abraham Maslow suggesting that people are motivated by five basic categories of needs: physiological, safety, love/belonging, esteem, and self-actualization, which must be fulfilled in sequence.