CCIFP – Accurate Answers To All Questions (A+)
Unbalanced items Correct Answer - Cost in excess or billings in excess
deferred revenues or deferred cost
What are unbalanced items a result of? Correct Answer - The conversion
of the contractor's day to day accounting records related to long term
contracts to the percentage of completion method.
Cost to cost method Correct Answer - divide cost incurred by total cost
expected
Physical completion method Correct Answer - Determined by project
engineers based on their assessment of work completed and total estimated
work to be performed.
Materials stored at the job site and not yet consumed or put in place generally
should be _____ from the cost to cost percentage of completion calculation
Correct Answer - omitted
Cost in excess of billings could indicate the following problems: Correct
Answer - 1. Contractor using funds to purchase necessary materials.
2. poor billing cycle
3. billing disagreements with customers
4. poor cost estimates.
Cost in Excess of billings Correct Answer - Asset
Billings in Excess of Cost Correct Answer - Liability
If a contractor is unable to reasonably estimate the percentage of work
performed or the total cost to complete the contractor can use Correct
Answer - the completed-contract method
How are revenues and cost presented on the financials statements for
uncompleted contracts? Correct Answer - The contract revenues and
costs are deferred on uncompleted contracts and the net asset or liability is
included in the current portion of the balance sheet
, When billings in excess of estimated cost and contract profits earned to date
that should be classified as Correct Answer - deferred income
Contract related assets Correct Answer - AR on contracts
unbilled contract receivables
cost and estimated earnings in excess of billings
other deferred contract costs
equipment and small tools specifically purchased for or expected to be used
on an individual contract
It is common practice to classify all contract related assets and liabilities as
Correct Answer - current
Contract related liabilities Correct Answer - AP on contracts
accrued contract cost
billings in excess of cost and estimated earning
deferred tax
advanced payments on contracts for mobilization
provision for losses
obligations for equipment
It is common practice to see provisions for liquidating damages included as
contract _____ as part of the estimated cost to complete, versus a reduction of
revenue Correct Answer - cost
Basic questions related to contract cost Correct Answer - 1. when should
they be recognized
2. what should be included
FASB ASC 605-35-37c states that G&A cost should ordinarily be charged to
expense as incurred, but might be accounted for as ___cost under the _______
Correct Answer - contract
completed contract method
FASB ASC 330-10-30-8 states that G&A expenses should be included as _____
charges, expect for the portion of expenses that may be clearly related to
production and thus constitute a part of inventory cost Correct Answer -
period
Unbalanced items Correct Answer - Cost in excess or billings in excess
deferred revenues or deferred cost
What are unbalanced items a result of? Correct Answer - The conversion
of the contractor's day to day accounting records related to long term
contracts to the percentage of completion method.
Cost to cost method Correct Answer - divide cost incurred by total cost
expected
Physical completion method Correct Answer - Determined by project
engineers based on their assessment of work completed and total estimated
work to be performed.
Materials stored at the job site and not yet consumed or put in place generally
should be _____ from the cost to cost percentage of completion calculation
Correct Answer - omitted
Cost in excess of billings could indicate the following problems: Correct
Answer - 1. Contractor using funds to purchase necessary materials.
2. poor billing cycle
3. billing disagreements with customers
4. poor cost estimates.
Cost in Excess of billings Correct Answer - Asset
Billings in Excess of Cost Correct Answer - Liability
If a contractor is unable to reasonably estimate the percentage of work
performed or the total cost to complete the contractor can use Correct
Answer - the completed-contract method
How are revenues and cost presented on the financials statements for
uncompleted contracts? Correct Answer - The contract revenues and
costs are deferred on uncompleted contracts and the net asset or liability is
included in the current portion of the balance sheet
, When billings in excess of estimated cost and contract profits earned to date
that should be classified as Correct Answer - deferred income
Contract related assets Correct Answer - AR on contracts
unbilled contract receivables
cost and estimated earnings in excess of billings
other deferred contract costs
equipment and small tools specifically purchased for or expected to be used
on an individual contract
It is common practice to classify all contract related assets and liabilities as
Correct Answer - current
Contract related liabilities Correct Answer - AP on contracts
accrued contract cost
billings in excess of cost and estimated earning
deferred tax
advanced payments on contracts for mobilization
provision for losses
obligations for equipment
It is common practice to see provisions for liquidating damages included as
contract _____ as part of the estimated cost to complete, versus a reduction of
revenue Correct Answer - cost
Basic questions related to contract cost Correct Answer - 1. when should
they be recognized
2. what should be included
FASB ASC 605-35-37c states that G&A cost should ordinarily be charged to
expense as incurred, but might be accounted for as ___cost under the _______
Correct Answer - contract
completed contract method
FASB ASC 330-10-30-8 states that G&A expenses should be included as _____
charges, expect for the portion of expenses that may be clearly related to
production and thus constitute a part of inventory cost Correct Answer -
period
