Question

Multiple choice accounting questions.

Assume the following facts regarding the construction of a bridge: Construction costs this period - 3,000,000 Total estimated construction costs - 10,000,000 Total sales price -15,000,000 The revenue that should be recognized this period is: Select one or more a 6,500,000 b. 4,500,000 c 5,000,000 d 3,000,000 Exceptions to the realization principle include the installment basis of revenue recognition for sales revenue and the completed contact method for long-term construction projects Select one: True False At the end of the accounting period, three trial balances are prepared Select one O True False The conceptual framework project resulted in identifying two primary qualitative characteristics that accounting information should posses relevance and reliability Select one True False The underlying assumptions of accounting includes all the following except: Select one or more a Going concem. b. Money measurement and periodicity c Business entity d. Matching

Answer 1

Answer to first question in the list: Option-(b): 4,500,000 Reason: Construction costs this period Total estimated construction costs Percentage of completion with respect to costs Total sales price (= Contract price) Revenue that should be recognized this period 3,000,000 10,000,000 30% [(3000000 / 10000000) x 100] 15,000,000 4,500,000 (15000000 x 30%]