Business, 17.03.2020 01:24 marbuscis99

Which of the following changes should be accounted for using the retrospective approach? Multiple Choice A change in accounting for long-term construction contracts by recognizing revenue over time rather than when the contract is completed.

Answers: 3

Show answers

Answers

A change in accounting for long-term construction contracts by recognizing revenue over time rather than when the contract is completed

Explanation:

The question is incomplete, we are only given one choice to choose from, we will explain retrospective approach and how it is applied. We will also apply the retrospective approach to the question

Retrospective approach is a method that is used in accounting when to account for changes for example when the new standard adopted changes recognition Criteria for expenses or income.

When using a retrospective approach to account for changes, we calculate the cumulative effect of the new recognition criteria or new standard from the first period and restate the cumulative effect for the entire historical period in the current period.

The revenue recognition criteria changed from recognizing revenue when contract is completed to recognizing revenue over time. Cumulative effect of recognising revenue over time will be calculated and restated in the current period.

Answer from: bertha4082

true ⇒ A change in accounting for long-term construction contracts by recognizing revenue over time rather than when the contract is completed.

Explanation:

The retrospective approach is used when the accounting standards are changed, and the accounts are adjusted so that they meet the new standards as if they had been used in the past. It basically tries to erase any trace from the previously used standard.

In this case we must first understand that construction companies use two accounting methods for long-term construction projects:

Completed contract method (CCM): the construction company will only recognize profit when the contraction process is complete. This method of accounting can only be used by home builders or for projects that do not exceed 2 years. Percentage of completion method (PCM): revenue is recognized by estimating the relative completion of a construction contract. There are no limitations on when this method can be used.

A construction company will probably change its accounting method because the project's completion time increased to over 2 years, and the IRS requires them to do so. In that case, the accounts have to be adjusted to meet the PCM method instead of the CCM. This means that the company must recognize revenue for at least the previous year, instead of trying to recognize it at the end of the project.

Answer from: Quest

answer; hazards;

Answer from: Quest

Cis te correct i think i c idk but i think it is c

Another question on Business

Business, 22.06.2019 14:30

The state in which the manufacturing company you work for is located regulates the presence of a particular substance in the environment to concentrations ≤ x. recently-released, reliable research endorsed by the responsible federal agency conclusively demonstrates that the substance poses no risks at concentrations up to 5x. your company has asked you to consider designing a new process with a waste discharge stream containing up to 2x of the substance. based on the stated conditions, describe this possible.

Answers: 2

Answer

Business, 22.06.2019 16:00

Advanced enterprises reports year-end information from 2018 as follows: sales (160,250 units) $968,000 cost of goods sold 641,000 gross margin 327,000 operating expenses 263,000 operating income $64,000 advanced is developing the 2019 budget. in 2019 the company would like to increase selling prices by 14.5%, and as a result expects a decrease in sales volume of 9%. all other operating expenses are expected to remain constant. assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. should advanced increase the selling price in 2019?

Answers: 3

Answer

Business, 22.06.2019 20:20

Tl & co. is following a related-linked diversification strategy, and soar inc. is following a related-constrained diversification strategy. how do the two firms differ from each other? a. soar inc. generates 70 percent of its revenues from its primary business, while tl & co. generates only 10 percent of its revenues from its primary business. b. soar inc. pursues a backward diversification strategy, while tl & co. pursues a forward diversification strategy. c. tl & co. will share fewer common competencies and resources between its various businesses when compared to soar inc. d. tl & co. pursues a differentiation strategy, and soar inc. pursues a cost-leadership strategy, to gain a competitive advantage.

Answers: 3

Answer

Business, 22.06.2019 20:20

Direct materials (4.2 x $15) $ 63direct labor ($12 x 17.5) $210manufacturing overhead ($2.40 x 17.5) $42total job cost $ 315dougan, inc. allocates overhead based on a predetermined overhead rate of $2.40 per direct labor hour. employees are paid $12.00 per hour. job 24 requires 4.2 pounds of direct materials at a cost of $15.00 per pound. employees worked a total of 17.5 hours to complete the job. actual manufacturing overhead costs totaled $80,000 for the year for the company. how much is the cost of job 24?

Answers: 1

Answer

You know the right answer?

Which of the following changes should be accounted for using the retrospective approach? Multiple Ch...

Questions