Revenue from Long Term Construction Contract is calculated or recognized

a. By multiplying the contract price by the ratio of cost over the contract price.

b. By multiplying the contract price by the percentage of completion using the expert estimates.

c. Dividing the contract price by the number of years of construction.

d. In reference to the billings made to the customer.

In a liquidation of a general partnership, which among the following will have to be paid first?

a. Those owing to partners other than for capital and profits

b. Those owing to outside creditors

c. Those owing to partners for capital

d. Those owing to partners for profits

Under PFRS 11, what are the two types of joint arrangements (i.e., contractual arrangement where two or more parties have joint control?)

a. Joint forces and joint agreement.

b. Joint forces and joint venture.

c. Joint venture and joint agreement

d. Joint venture and joint operation.

In a cash distribution program, which partner is considered the most vulnerable to losses as a result of a computation of loss absorption balance

a. The partner who bears the highest profit/loss percentage

b. The partner who has the highest loss absorption balance

c. The partner who has the lowest net capital interest

d. The partner who has the lowest loss absorption balance

Which of the following is a characteristic of a joint arrangement?

a. The parties are bound by a contractual arrangement.

b. The contractual arrangement gives two or more parties joint control over the arrangement.

c. The parties are bound by a contractual arrangement and the contractual arrangement gives the parties joint control over the arrangement.

d. None of these.

When it is probable that total contract costs will exceed total contract revenue, how shall it be accounted for?

a. The expected loss shall be recognized as an expense immediately regardless of the certainty or uncertainty of the outcome of a construction contract.

b. The expected loss shall be recognized as an expense immediately only when the outcome of the construction contract cannot be estimated reliably.

c. The expected loss shall be recognized as an expense by reference to the state of completion of the contract activity at the end of the reporting period when the outcome of a construction contract cannot be estimated reliably.

d. The expected loss shall be accounted for based on company's policy.