completed contract Flashcards
1
Q
when to use completed contract method
A
1) difficult to estimate cost2) many contracts in progress3) projects in short duration/collections not assured
2
Q
excess of cost over billings is a recorded as what
A
Current asset——–**CIP”cost of uncompleted contracts in excess of related billings”
3
Q
excess of billings over costs is recorded as what
A
current liability”billings in excess of related cost”
4
Q
Where are overhead and direct cost charged to?Where are billings/cash received charged to?
A
1) CIP (asset)2) advances (liability)
5
Q
advantages
A
based on final results and NOT ESTIMATES
6
Q
disadvantage
A
Does not matching principle when contract over more than 1 year
