30、Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted. Compared to the completed contract method of revenue recognition, will the percentage-of-completion method most likely result in higher: | total assets? | liabilities? | A. | No | No | B. | No | Yes | C. | Yes | No | D. | Yes | Yes |
A. Answer A B. Answer B C. Answer C D. Answer D
Correct answer = C
"Understanding the Income Statement," Thomas R. Robinson, Hennie van Greuning, Elaine Henry, and Michael A. Broihahn
2008 Modular Level I, Vol. 3, pp. 148-151
Study Session 8-32-b
explain the general principles of revenue recognition and accrual accounting, demonstrate specific revenue recognition applications (including accounting for long-term contracts, installment sales, barter transactions, and gross and net reporting of revenue), and discuss the implications of revenue recognition principles for financial analysis
Compared to the completed-contract method, the percentage-of-completion method will most likely result in higher total assets, reflecting the accrual of gross profit during the contract period and lower liabilities, as the higher level of construction-in-progress provides a larger offset to advance billings.
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发表于 2008-5-27 14:27
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