The Following Is Statement Made in IAS 37 Provisions, Contingent

question 4

Multiple Choice

The following is statement made in IAS 37 Provisions, Contingent Liabilities and Contingent Assets:
'a contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it'.
This statement provides a definition of:

• A) an onerous contract;
• B) a deferred liability;
• C) a future operating loss;
• D) a present obligation.

---

Definitions:

Equivalent Units

A concept used in cost accounting to represent the amount of work done on incomplete units, expressed in terms of fully completed units.

Work In Process

Items in a manufacturing process that are not yet finished products, including raw materials, labor in progress, and overhead costs.

Work In Process Account

An account that tracks the costs associated with partially completed goods in manufacturing processes.

Process Cost System

An accounting method used to track the costs associated with processes that produce homogeneous products.