Contract Costing Method Quiz
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Questions and Answers

What is the method of Costing used when a job is large and requires considerable time to complete?

  • Process costing
  • Activity-based costing
  • Job costing
  • Contract costing (correct)

    • What determines the completed contract price in contract costing?

  • Architect certificate (correct)
  • Contractor's estimate
  • Contractee's assumption
  • Market price index

    • When is the contract price paid to the contractor in contract costing?

  • Based on contractor's estimate
  • Before initiation of work
  • Monthly installments
  • After completion of work (correct)

    • In contract costing, what kind of account does the contractor prepare for each contract?

    <p>Contract account (A)</p> Signup and view all the answers

    What does the debit side of the contract account in contract costing record?

    <p>Expenses incurred by the contractor (A)</p> Signup and view all the answers

    What type of companies typically adopt contract costing?

    <p>Building construction companies (B)</p> Signup and view all the answers

    What is another term for contract costing?

    <p>Terminal costing (B)</p> Signup and view all the answers

    How does a contractor determine the profit or loss of a particular job in contract costing?

    <p>From the architect certificate (D)</p> Signup and view all the answers

    Who pays the contract price to the contractor in contract costing?

    <p>Contractee (A)</p> Signup and view all the answers

    What is considered as a cost unit in contract costing?

    <p>Each contract (D)</p> Signup and view all the answers

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