Question Chapter 15

A construction contract In which the contractor is reimbursed for pre-defined casts plus a percentage of these or a fixed fee mark-up, is called:

• Fixed price contract

• Pre-defined contract

• Cost plus contract

• Negotiated contract

A contract In which the contractor agrees to a pre-determined contract price, which in some cases is subject to cost escalation clauses is called a:

• Fixed price contract

• Pre-defined contract

• Cost plus contract

• Negotiated contract

A Limited ships goods by sea to a foreign company, B Limited. As per the terms of the contract, any loss or damage to the goods until it reaches the factory of B limited shall be borne by A limited. In this case when does A Limited recognize revenue?

• When the goods leave the factory of A Limited

• When the goods are loaded On to the ship

• When the goods reach the country in which B is located

• When goods reach the factory of B Limited

Which of the following is not a requirement in determining whether the construction of a series of assets should be treated as separate contracts?

• Separate proposals were submitted

• The customer could use different contractors for each asset

• Contracts will run concurrently or in a single sequence

• costs and revenues can be separated for each asset

Revenue:

• Includes gains

• Is the gross inflow of economic benefits of the ordinary activities, when those inflows result increases in equity, other than increases relating to contributions from investors

• Includes sales taxes and value added tax

• All of the above

When Is a sale recognized?

• Whenever the seller decides to recognize it

• At the end of each accounting period

• When certain conditions have been satisfied

• When sales contract is signed

According to IFRS 15, the asset is transferred to a customer...

• When the asset is physically delivered to the customer’s premises

• On the day specified by a contract with the customer

• When the customer obtains control over

• On the day when the entity satisfies all performance obligations, specified in the contract with the custom