CCIFP EXAM Questions with 100% Correct Answers | Verified | Updated
(Actual Exam) LATEST VERSION!!
The Project Management Team of ABC Company has informed the CFO that a project is running into
trouble with respects to the budgeted costs for the work. They have informed the CFO that they expect
the project to sustain a loss of 15%. The job is expected to be completed in 2 years. The company uses
the percentage of completion method to recognize income. When should the company recognize the
potential loss? - (ANSWER)In full in the year the loss was determined
Which of the following is a contract-related asset? - (ANSWER)Costs and Estimated Earnings in Excess of
Billings
Which of the following is a contract-related liability? - (ANSWER)Accrued Contract Costs
What type of contract is used when one entity works under a single contract to provide both the design
of the work and the performance of the construction services? - (ANSWER)Design-build contract
What type of contracting method is also known as lump sum contract, and provides for the contractor's
performance of all work to be performed under the contract for a stated price? - (ANSWER)Fixed price
contract method
What contracting method provides for reimbursement of allowable or otherwise defined costs incurred
plus a fee for the contractor's services? - (ANSWER)Cost-plus-fee contract method
What contract method generally provides for payments to the contractor on the basis of direct labor
hours at fixed hourly rates and cost of materials or other specified costs? - (ANSWER)Time and material
contract method
What contract method is used when a contractor is paid a specified price per each unit of output? -
(ANSWER)Unit price contract method
The portion of total billing that is NOT required to be paid by the owner until certain conditions are met
is known as... - (ANSWER)Retention
,CCIFP EXAM Questions with 100% Correct Answers | Verified | Updated
(Actual Exam) LATEST VERSION!!
ABC Company hires a subcontractor to work on a project that will span over 5 years. The subcontract
amount is $500,000 and is to be billed monthly to ABC Company. Retention of 10% is to be held until the
subcontractor is 75% complete and the owner of the project has approved the release of retention. How
should ABC Company record the subcontractor retention on its records in the first year of the project? -
(ANSWER)Current liability
ABC Company is preparing their monthly billing for the XYZ Owner Development project and the
following are the details of the monthly application for payment: Total Gross Base Contract Billing
$1,000,000 inclusive of $200,000 in stored material billing, and gross change order billing of $100,000.
The retention amount is 10%. What is the correct journal entry to record the current month's application
for payment? - (ANSWER)DR: Contract Receivable - $990,000
DR: Retention Receivable - $110,000
CR: Contract Revenue - $1,100,000
Step-by-Step Solution
1. Calculate the Total Billing Amount:
Gross Base Contract Billing: $1,000,000
Gross Change Order Billing: $100,000
Total Gross Billing = $1,000,000 + $100,000 = $1,100,000
2. Calculate the Retention Amount:
Retention Amount = 10% of Total Gross Billing
Retention = $1,100,000 × 10% = $110,000
3. Calculate the Contract Receivable:
Contract Receivable = Total Gross Billing - Retention
Contract Receivable = $1,100,000 - $110,000 = $990,000
, CCIFP EXAM Questions with 100% Correct Answers | Verified | Updated
(Actual Exam) LATEST VERSION!!
ABC Company enters into a purchase order to purchase new construction equipment from XYZ Company.
The equipment has a useful life of 5 years. The details of the purchase order are as follows:
- Equipment Cost: $500,000
- Freight Costs: $5,000
- Sales Tax: $35,000
The company also signed a maintenance agreement for 5 years, which will be billed separately at the
rate of $10,000 plus sales tax of $700 per year.
Question: At what value should the equipment be recorded on the books of ABC Company? -
(ANSWER)$540,000
Costs and estimated earnings in Excess of Billings on uncompleted contracts are recorded on the
contractor's financial statements as... - (ANSWER)A current asset
Billings in Excess of Costs and estimated earnings on uncompleted contracts are recorded on the
contractor's financial statement as... - (ANSWER)A current liability
The practice of unbalanced bidding, is referred to as... - (ANSWER)Front-end Loading
ABC Company sold a crane to XYZ Company for $100,000. The crane originally cost $300,000, and the
company had accumulated depreciation on the equipment totaling $150,000. What is the entry that ABC
Company would make to remove the asset from its books? - (ANSWER)DR. Cash $100,000
DR. Accumulated Depreciation $150,000
DR. Loss on Sale of Equipment $50,000
CR. Fixed Asset Equipment $300,000
(Actual Exam) LATEST VERSION!!
The Project Management Team of ABC Company has informed the CFO that a project is running into
trouble with respects to the budgeted costs for the work. They have informed the CFO that they expect
the project to sustain a loss of 15%. The job is expected to be completed in 2 years. The company uses
the percentage of completion method to recognize income. When should the company recognize the
potential loss? - (ANSWER)In full in the year the loss was determined
Which of the following is a contract-related asset? - (ANSWER)Costs and Estimated Earnings in Excess of
Billings
Which of the following is a contract-related liability? - (ANSWER)Accrued Contract Costs
What type of contract is used when one entity works under a single contract to provide both the design
of the work and the performance of the construction services? - (ANSWER)Design-build contract
What type of contracting method is also known as lump sum contract, and provides for the contractor's
performance of all work to be performed under the contract for a stated price? - (ANSWER)Fixed price
contract method
What contracting method provides for reimbursement of allowable or otherwise defined costs incurred
plus a fee for the contractor's services? - (ANSWER)Cost-plus-fee contract method
What contract method generally provides for payments to the contractor on the basis of direct labor
hours at fixed hourly rates and cost of materials or other specified costs? - (ANSWER)Time and material
contract method
What contract method is used when a contractor is paid a specified price per each unit of output? -
(ANSWER)Unit price contract method
The portion of total billing that is NOT required to be paid by the owner until certain conditions are met
is known as... - (ANSWER)Retention
,CCIFP EXAM Questions with 100% Correct Answers | Verified | Updated
(Actual Exam) LATEST VERSION!!
ABC Company hires a subcontractor to work on a project that will span over 5 years. The subcontract
amount is $500,000 and is to be billed monthly to ABC Company. Retention of 10% is to be held until the
subcontractor is 75% complete and the owner of the project has approved the release of retention. How
should ABC Company record the subcontractor retention on its records in the first year of the project? -
(ANSWER)Current liability
ABC Company is preparing their monthly billing for the XYZ Owner Development project and the
following are the details of the monthly application for payment: Total Gross Base Contract Billing
$1,000,000 inclusive of $200,000 in stored material billing, and gross change order billing of $100,000.
The retention amount is 10%. What is the correct journal entry to record the current month's application
for payment? - (ANSWER)DR: Contract Receivable - $990,000
DR: Retention Receivable - $110,000
CR: Contract Revenue - $1,100,000
Step-by-Step Solution
1. Calculate the Total Billing Amount:
Gross Base Contract Billing: $1,000,000
Gross Change Order Billing: $100,000
Total Gross Billing = $1,000,000 + $100,000 = $1,100,000
2. Calculate the Retention Amount:
Retention Amount = 10% of Total Gross Billing
Retention = $1,100,000 × 10% = $110,000
3. Calculate the Contract Receivable:
Contract Receivable = Total Gross Billing - Retention
Contract Receivable = $1,100,000 - $110,000 = $990,000
, CCIFP EXAM Questions with 100% Correct Answers | Verified | Updated
(Actual Exam) LATEST VERSION!!
ABC Company enters into a purchase order to purchase new construction equipment from XYZ Company.
The equipment has a useful life of 5 years. The details of the purchase order are as follows:
- Equipment Cost: $500,000
- Freight Costs: $5,000
- Sales Tax: $35,000
The company also signed a maintenance agreement for 5 years, which will be billed separately at the
rate of $10,000 plus sales tax of $700 per year.
Question: At what value should the equipment be recorded on the books of ABC Company? -
(ANSWER)$540,000
Costs and estimated earnings in Excess of Billings on uncompleted contracts are recorded on the
contractor's financial statements as... - (ANSWER)A current asset
Billings in Excess of Costs and estimated earnings on uncompleted contracts are recorded on the
contractor's financial statement as... - (ANSWER)A current liability
The practice of unbalanced bidding, is referred to as... - (ANSWER)Front-end Loading
ABC Company sold a crane to XYZ Company for $100,000. The crane originally cost $300,000, and the
company had accumulated depreciation on the equipment totaling $150,000. What is the entry that ABC
Company would make to remove the asset from its books? - (ANSWER)DR. Cash $100,000
DR. Accumulated Depreciation $150,000
DR. Loss on Sale of Equipment $50,000
CR. Fixed Asset Equipment $300,000
