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The principal advantage of the completed-contract method is that
Difference between Percentage of Completion method and Completed Contract method?
A con of the completed contract method of accounting is that nothing is noted in the ledger until the contract is completed. A pro is that there will be less paperwork in accepting partial payments.
D) MACRSSilly accounting students posting questions for their homework....
When you start from net income to calculate the operativ cashflow you have to (1) add (substract) all operativ expenses (income) that appear in the income statement but did not result in cash in- or outflow, and (2) add (substract) all operativ cash inflow (outflow) that were not income (expense) and thus not recorded in the income statement. The net income plus all these adjustments equals the operativ cashflow. Depreciation were recorded in the income statement as an expense but it did not result in an cash outflow. You have to add it therefore to the net income. The method described above is the indirect method to calculate the operativ cash flow.
The principal advantage of the completed-contract method is that
Difference between Percentage of Completion method and Completed Contract method?
A con of the completed contract method of accounting is that nothing is noted in the ledger until the contract is completed. A pro is that there will be less paperwork in accepting partial payments.
The Product MethodThe Income Method or theThe Expenditure Method
This method is used for long-term projects when there is a contract, and reliable estimates of production completed, revenues and costs are possible.
yes they will
At the end of the contract the same amount will have been recognized under both methods for the entire period of the contract. However, the final year of the contract will not usually be the same under both methods. In other words, if a contract spans 2 years, the percentage completion will pick up part of the income in year one and part in year 2. The combined total picked up in both years under percentage completion will be the amount reported under completed contract in year 2 (nothing will be picked up in year 1).
prepere all necessary and materials etc.
As the percentage of completion method requires definite receipts but estimated costs so this method is not advisable when receipts of contract are not given. In this scenario there generally appears no contract so it must be the case of a builder who intends to sell the constructed completed project after incurring self costs. In such situations the completion method suits the best.In case the project has been finalised with fixedcontract price and the contractor has his own estimated costs or else the contractor/ builder has entered into contract with various parties ( the prospective buyers) , in advance( before commencing the project/ billing etc.,), with sure receipts then the percentage of completion method is better to be adopted.
Following are the method of national income accounting :-Product MethodExpenditure MethodIncome Method
D) MACRSSilly accounting students posting questions for their homework....
MY tercher told me ,that has 3 method to calculate. 1.income method -total all money earn by factors of production ( wage,rent ,interest,profit) 2.output method - total value of all output produced in the economy(value added for manufactured goods) 3.expenditure method (total of capital asserts) all money on goods and servise +adiction to stock+(import spending-export spending)+(subsidies-taxes)the earned income of workers added together then subtracted from investors profit.