When Work to Be Done and Costs to Be Incurred

question 8

Multiple Choice

When work to be done and costs to be incurred on a long-term contract cannot be reliably estimated, which of the following methods of revenue recognition is preferable?

• A) Percentage-of-completion method
• B) Completed contract method
• C) Sales method
• D) Instalment method

Understand the concepts and tools of quality management.

Identify different types of control charts and their application.

Recognize the importance and method of sorting issues through Pareto analysis.

Describe the cause-and-effect (Ishikawa) diagram and its application in identifying problem causes.

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Definitions:

Mean

The mean is the average of a set of numbers, calculated by dividing the sum of all values by the number of values.

Standard Deviations

Measures that express the variability or spread in a set of data from its mean, showing how much variation there is from the average.

Normal Curve

A symmetrical, bell-shaped curve representing the distribution of a set of data where most occurrences take place in the middle of the range and taper off toward either end.

Z Score

A statistical measurement that describes a value's relationship to the mean of a group of values, expressed in terms of standard deviations from the mean.