Tell whether the following statements are True or False.

1.Companies must use the percentage-of-completion (overtime) method when estimates progresses toward completion are reasonably dependable.

2.The most popular input measure used to determine the progress toward completion is the cost-to-cost basis.

3.lf the difference between the Construction in Process and the Billings on Construction in Process account balances is a debit, the difference is reported as a current asset.

4.The Construction in Process account includes only construction costs under the percentage-of-completion method (overtime).

5.Udder the cost recovery (point in time) method, companies recognize revenue and costs only when the contract is completed.

6.The principal advantage of the cost recovery (point-in-time) method is that reported revenue reflects final results rather than estimates.

7.Companies must recognize a loss on an unprofitable contract under the percentage-of-completion method (overtime) but not the cost recovery (point-in-time) method.

8.A loss in the current period on a profitable contract must be recognized under both the percentage-of-completion (overtime) and cost recovery (point-in-time) method.

9.Under the completion-of-production basis, companies recognize revenue when agricultural crops are harvested since the sales price is reasonably assured and no significant costs are involved in product distribution.

10. The provision for a loss on an unprofitable contract may be combined with the Construction in Process account balance under percentage-of-completion (overtime) but not cost recovery (point-in-time) method.

11. Under the percentage-of-completion (overtime) method, amounts billed and the cash actually received affect income recognition.

12. Under the percentage-of-completion (overtime) method, the percent complete is often estimated by comparing the cost incurred to date with the total estimated cost to complete.

13. The percentage-of-completion (overtime) and cost recovery (point-in-time) methods calculate different amounts of total profit or loss for a particular contract.

14. Use of the percentage-of-completion (overtime) method is dependent on a firm's ability to make dependable forecasts of future costs.

15. Under the cost recovery (point-in-time) method, gross profit or loss is never recognized until the contract is completed.

16. Under the cost recovery (point-in-time) method used to account for long-term contracts under PFRS, equal amounts of revenue and cost are recognized until all costs are recovered.

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

18. The most popular input measure under percentage-of-completion (overtime) accounting is the cost- to-cost (point-in-time) method.

19. Estimates of architects and engineers of percentage-of-completion (overtime) are not acceptable under generally accepted accounting principles.

20. 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 (overtime) method.