Question

2 of 10 (4 complete) i Contract information ccep mot pa forma 1,570,000 Contract price achy any jo 2015 128,100 $ 2016 850,000 128,100 978,100 Actual construction costs incurred during the year Construction costs incurred in prior years Cumulative construction costs incurred to date Estimated costs to complete Estimated total costs Progress billings made during the year Cash collections during the year 128,100 $ 512,400 640,500 $ 930,000 $ 785,000 $ 978,100 640,000 785,000 per in Print Done Done

Answer 1

2.

Answer: 2^nd option

Since this is the cash method, revenues could only be recognized if received and expenses if paid. This is applicable for small businesses.

Other options are not correct:

1^st option: since this is not accrual method, income earned or expenses incurred should not be considered.

3^rd option: it is allowed in schedule C

4^th option: this is a hybrid system, which is not allowed in cash method.