Revenue Recognition Word Scramble
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| Question | Answer |
| The calculation of the income recognized in the third year of a 5-year construction contract accounted for using the percentage-of-completion method includes the ratio of | D. Total costs incurred to date to total estimated costs. |
| A company appropriately uses the completed-contract method to account for a long-term construction contract. Revenue is recognized when progress billings are | D. No No |
| Haft Construction Co. has consistently used the percentage-of-completion method. | D. $150,000 |
| Pell Co.’s construction jobs (described below) commenced during the year just ended. | A. ($20,000) |
| State Co. recognizes construction revenue and expenses using the percentage-of-completion method. | A. $50,000 |
| A building contractor has a fixed-price contract to construct a large building. | B. As progress is made toward completion of the contract. |
| Which of the following is used in calculating the gross profit recognized in the fourth and final year of a contract accounted for by the percentage-of-completion method? | A. Yes Yes |
| During Year 1, Mitchell Corp. started a construction job with a total contract price of $600,000. | D. $120,000 |
| Gow Constructors, Inc., has consistently used the percentage-of-completion method of recognizing gross profit. | D. $600,000 |
| POC Company accounts for a long-term construction contract using the percentage-of-completion method. | B. A current liability of $20,000. |
| Lake Construction Company has consistently used the percentage-of-completion method of recognizing gross profit. | B. $3,300,000 |
| How should the balances of progress billings and construction in progress be shown at reporting dates prior to the completion of a long-term contract? | C. Net, as a current asset if debit balance and current liability if credit balance. |
| A company used the percentage-of-completion method of accounting for a 4-year construction contract. GP Pre Recog & Prog Bill to Date | C. Yes No |
| A company uses the percentage-of-completion method to account for a 4-year construction contract. Prog Bill & Collec on Prog Bill | C. No No |
| During Year 1, Tidal Co. began construction on a project scheduled for completion in Year 3. | D. Decrease Decrease |
| Kechara Corp. started a long-term construction project in Year 1. | A. $350,000 |
| Hansen Construction, Inc., has consistently used the percentage-of-completion method of recognizing gross profit. | B. $100,000 |
| A company uses the completed-contract method to account for a long-term construction contract. Revenue and gross profit are recognized when recorded progress billings | B. No No |
| Long Corporation began construction work under a 3-year contract this year. | B. $64,000 |
| Fact Pattern: Data pertaining to Pell Co.’s construction jobs, which commenced during Year 1, are as follows: | B. $20,000 |
| A company uses the completed-contract method to account for a 4-year construction contract which is currently in its third year. Third Year Progress Billings | A. Not third year third year |
| A company began work on a long-term construction contract in Year 1. The contract price was $3,000,000. | D. $350,000 |
| The contract price is $1,000. Under IFRS, what is the profit recognized in Year 2? | C. $550 |
| Paulson Company uses the percentage-of-completion method to account for long-term construction contracts. | B. $70,000 |
| Falton Co. had the following first-year amounts related to its $9,000,000 construction contract: | A. $0 |
| Frame construction company’s contract requires the construction of a bridge in 3 years. | D. $150,000 |
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