The principal advantage of the cost-recovery method is that __________________.

a.

it is not necessary to recognize revenue at the point of sale

b.

a greater amount of gross profit and net income is reported than is the case when the percentage-of-completion method is used

c.

reported revenue is based on final results rather than estimates of unperformed work

d.

it reflects current performance when the period of a contract extends into more than one accounting period

Clear my choice

2.Which of the following Statement of Cash Flows ratios is a measure of a companys financial flexibility?

a.

Cash debt coverage and free cash flow.

b.

Cash debt coverage.

c.

Free cash flow.

d.

Current cash debt coverage.