1. A company used the percentage-of-completion method of accounting for a 4-year construction contract. Which of the following items is needed to make the calculation of income recognized in the fourth year?

Select one:

a. Income Previously Recognized, but not the Contract Price

b. Contract Price, but not Income Previously Recognized

c. Both Contract Price and Income Previously Recognized

d. Neither Income Previously Recognized nor Contract Price

2. The Quinlan Construction Company began work on a three-year contract in 2015. In 2015, Costs plus Gross Profit recognized were $15, Billings were $20, Collections were $18. In what section would the CIP account appear in the financial statements?

Select one:

a. Current Assets

b. Current Liabilities

c. Noncurrent Assets

d. Noncurrent Liabilities

3. Under the percentage-of-completion method:

Select one:

a. Revenue, cost, and gross profit are recognized during the production cycle.

b. Revenue and cost are recognized during the production cycle, but gross profit recognition is deferred until the contract is completed.

c. Revenue, cost, and gross profit are recognized at the time the contract is completed.

d. Gross Profit is recognized during the production cycle, but net losses are delayed until the contract is completed.