True or False

1. If the difference between the Construction in Progress and the Billings on Construction in Progress account is a debit, the difference is reported as a current asset

2. Under the cost recovery method, companies recognize revenue and costs only when the contract is completed.

3. Under the percentage of completion method, the percent complete is often estimated by comparing the cost incurred to date with the total estimated cost to complete

4. The most popular input measure under percentage of completion accounting is the cost-to-cost method

6. At the conclusion of a construction contract, the balance in Construction in Progress will be exactly equal to the amount in Progress Billings on Construction Contracts when using the percentage of completion.

7. Estimated losses on long term contracts are recognized ratably over the contract term regardless of the revenue recognition method

8. The Construction in Progress account includes only construct costs under the percentage of completion method.

9.The cost recovery method recognizes revenue only to the extent of costs incurred that are expected to be recoverable.

10. Change orders are modifications of an original contract that effectively change the provisions of the contract only at the option of the contractor.

11. Recognition of franchise fee revenue is dependent on judgment of both substantial performance and the collectability

12. Initial fees are always recognized on the date they were received.

13. The commencement of operations by the franchisee shall be presumed to be the last day of operations at which substantial performance has occurred.

14. Initial franchise fees are received in return for the continuing rights granted by the franchise agreement and for providing such services as management training, advertising and promotion and other support.

15. Franchisors occasionally have the right to repossess franchises. When a franchisee decides not to open an outlet or there are violations of the franchise contract that warrant its cancellation, the franchisor may recover franchise rights through repossession.