Builder Construction Company's Projects Extend Over Several Years and Collection

question 52

Multiple Choice

Builder Construction Company's projects extend over several years and collection of receivables is reasonably certain.Each project has a contract that specifies a price and the rights and obligations of all parties.Both the contractor and the customer are expected to fulfill their contractual obligations on each project.Reliable estimates can be made of the extent of progress and cost to complete each project.The method that the company should use to account for construction revenue is

• A) installment sales.
• B) percentage-of-completion.
• C) completed-contract.
• D) cost recovery.

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Definitions:

Standard Deviation

An indicator of how much the values in a dataset spread out or differ from each other.

Normal Curve

A bell-shaped curve that represents the distribution of many types of data where most occurrences take place in the middle of the range.

Probability

The measure or estimation of how likely it is that an event will occur, expressed as a number between 0 (impossible) and 1 (certain).

Median

A statistical measure that represents the middle value in a given set of data when it is arranged in numerical order.