CCIFP Study Guide – Questions With Fully Explained
Solutions
Percentage of Completion method: Correct Answer - recognizes income
as work on a contract progresses
Completed Contract method: Correct Answer - Recognizes income only
when the contract is completed
Units of delivery method: Correct Answer - Recognizes as revenue the
contract price of units of a basic production product delivered during a period
and as the cost of earned revenue the costs allocable to the delivered units.
The units of delivery is a modification of the: Correct Answer -
percentage-of-completion method of accounting for contracts
The use of either of the two generally accepted methods of accounting
involves, to a greater or lesser extent, three key areas of estimates and
uncertainties Correct Answer - The extent of progress towards
completion, contract revenues and contract costs
Percentage of method is considered preferable when: Correct Answer -
Estimates of costs to complete and extent of progress toward completion of
long term contracts are reasonably dependable
Percentage of Completion and The completed contracts method Correct
Answer - Both of the two generally accepted methods of accounting for
contracts
Assets constructed and intended for sale or lease Correct Answer -
Qualifying assets that warrant capitalization of interest
Statement of Position, Scope of: Correct Answer - applies to accounting
for performance contracts for which specifications are provided by the
customer for the construction of facilities or the production of goods or the
provisions of related services that are reported in financial statements
prepared in comformity with generally accepted accounting principles.
Solutions
Percentage of Completion method: Correct Answer - recognizes income
as work on a contract progresses
Completed Contract method: Correct Answer - Recognizes income only
when the contract is completed
Units of delivery method: Correct Answer - Recognizes as revenue the
contract price of units of a basic production product delivered during a period
and as the cost of earned revenue the costs allocable to the delivered units.
The units of delivery is a modification of the: Correct Answer -
percentage-of-completion method of accounting for contracts
The use of either of the two generally accepted methods of accounting
involves, to a greater or lesser extent, three key areas of estimates and
uncertainties Correct Answer - The extent of progress towards
completion, contract revenues and contract costs
Percentage of method is considered preferable when: Correct Answer -
Estimates of costs to complete and extent of progress toward completion of
long term contracts are reasonably dependable
Percentage of Completion and The completed contracts method Correct
Answer - Both of the two generally accepted methods of accounting for
contracts
Assets constructed and intended for sale or lease Correct Answer -
Qualifying assets that warrant capitalization of interest
Statement of Position, Scope of: Correct Answer - applies to accounting
for performance contracts for which specifications are provided by the
customer for the construction of facilities or the production of goods or the
provisions of related services that are reported in financial statements
prepared in comformity with generally accepted accounting principles.
