The Body of knowledge for the CCIFP – Answers from previous Post!
On our previous post we discussed Chapter 4 – Income Recognition and we had homework!
How many of you did your homework? Come on now… raise your hands!! : – )
Well, no worries… because we are going to answer them in this post!
⇒In 1981 the AICPA issued a new Audit and Accounting Guide, “Construction Contractors”. Simultaneously, the AICPA issued a statement of Position 81-1 now known as “ASC 605-35” – If you answered D you answered correctly!
⇒Of the two GAAP acceptable methods for income recognition, “Percentage of Completion Method” is more preferred! If you answered B you answered correctly!
⇒Acceptable income recognition methods in accordance with GAAP would be
(A- Completed contract Method)
- Completed Contract Method
- Percentage of Completion Method
⇒Which income recognition method is considered the Percentage of Completion Method?
- D – Revenue, costs and gross profit are recognized in all accounting periods throughout the duration of the contract
⇒The Cash Basis, Accrual (Billing) and the Hybrid Basis are acceptable for financial reporting in conformity. If you answered C you answered correctly!
How many of you answered them correctly? I’m sure that all of you answered them correctly! : – )
Well, this will be a short post, so let’s do some home work:
Let’s move to Chapter 6 – Legal Issues in “THE BOOK”
Go ahead and read this chapter. We’ll be discussing this on the next post!
For those of you that are in the path of IRMA, please get out of where you are. It’s not worth the risk in trying to stick it out. Go the the FEMA website to obtain contact information, news and resources.
Until next Post!