Costing - Study Mode
[#891] The basis for determining profit to be taken into account on incomplete contract is ________.
Correct Answer
(C) percentage of work certified as done
Explanation
Solution: The basis for determining profit to be taken into account on incomplete contract is percentage of work certified as done.
[#892] The amount paid to sub-contractor is ________.
Correct Answer
(B) debited to contract a/c
Explanation
Solution: The amount paid to sub-contractor is debited to contract a/c. Contract means a big job in which work is done at site and not in factory premises. The cost of each contract is ascertained. Thus in this method of costing, each contract is a cost unit and an account is opened for each contract in the books of contractor to ascertain profit/loss thereon.
[#893] Work uncertified is ________.
Correct Answer
(B) credited to contract a/c
Explanation
Solution: Work uncertified is credited to contract a/c. The cost of work uncertified represents the cost of work which has already been. completed, but for that the contractor has not received completion certificate from the contractee's surveyor or architect.
[#894] In case of complete contract, the whole amount of profit is transferred to ________.
Correct Answer
(C) profit and loss a/c
Explanation
Solution: In case of complete contract, the whole amount of profit is transferred to profit and loss a/c.
[#895] Cost accounting disclose . . . . . . . .
Correct Answer
(B) profit/loss of a product, job or service