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400-007 Braindumps VCE
  • Exam Code: 400-007
  • Exam Name: Cisco Certified Design Expert (CCDE v3.0) Written Exam

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A building contractor has a fixed-price contract to construct a large building. It is estimated that the building will take 2 years to complete. Progress billings will be sent to the customer at quarterly intervals. Which of the following describes the preferable point for revenue recognition for this contract if the outcome of the contract can be estimated reliably?
A. As cash is received.
B. As progress is made toward completion of the contract.
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D. When the contract is completed.
Answer: B
Under the percentage-of-completion method, revenues and expenses are recognize based on the stage of completion at the balance sheet date if the outcome of the contract can be estimated reliably. For a fixed-price contract, the outcome can be estimated reliably if total revenue can be measured reliably.2) it is probable that the economic benefits of the contract will flow to the enterprise.3) contract costs to complete and stage of completion can be measured reliably, and4) contract costs can be clearly identified and measured reliably so that actual and estimated costs can be compared.

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