Bouchard512 - M ultiple Choice(2 points each 1 The revenue...

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Multiple Choice (2 points each) 1. The revenue recognition principle provides that revenue is recognized when a. it is realized. b. it is realizable. c. it is realized or realizable and it is earned. d. none of these. 2. The percentage-of-completion method must be used when certain conditions exist. Which of the following is not one of those necessary conditions? 3. The Nathan Company is involved in the construction of an asset under a long-term construction contract. At the end of the third year of the five-year contract, the cost estimates indicate that a loss will result on the completion of the entire contract. In accounting for this contract, the entire expected loss must be recognized in the current period under the Percentage-of- Completed- Completion Method Contract Method 4.   A sale should  not  be recognized as revenue by the seller at the time of sale if
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5. Ramos, Inc. began work in 2008 on contract #3814, which provided for a contract price of $7,200,000. Other details follow: 2008 2009 Costs incurred during the year $1,200,000 $3,675,000 Estimated costs to complete, as of December 31 3,600,000 0 Billings during the year 1,350,000 5,400,000 Collections during the year 900,000 5,850,000 Assume that Ramos uses the percentage-of-completion method of accounting. The portion of the total gross profit to be recognized as income in 2008 is a. $450,000. b. $600,000. c. $1,800,000. d. $2,400,000.
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