CCIFP Actual Exam Practice Guide
(Question with Verified Answers) |
Brand New Version
1. Percentage of Completion method: - ANSWER recognizes income as work
on a contract progresses
2. Completed Contract method: - ANSWER Recognizes income only when
the contract is completed
3. Units of delivery method: - ANSWER Recognizes as revenue the contract
price of units of a basic production product delivered during a period and as
the cost of earned revenue the costs allocable to the delivered units.
4. The units of delivery is a modification of the: - ANSWER percentage-of-
completion method of accounting for contracts
5. Monetary - ANSWER The "Monetary" unit assumption means transactions
of U.S. companies are reported in dollars
6. Matching - ANSWER Adjusting entries help to achieve the "Matching"
principle
7. Historical - ANSWER The cost principle is often described as the
"Historical" cost
,8. Industry - ANSWER "Industry" practices allows the format of public
utility's balance sheet to be different from that of a manufacturer
9. Materiality - ANSWER The concept of "Materiality" allows for the
violation of an accounting principle when the amounts are insignificant
10.Economic - ANSWER The "Economic" entity assumptions results in
business transactions being kept separate from a sole proprietor’s
11.Conservatism - ANSWER In case of uncertainty, less profit is reported
under this concept
12.Disclosure - ANSWER Full "Disclosure" is achieved through the notes to
the financial statements
13.Periodicity - ANSWER This assumption justifies quarterly financial
statements
14.Cost - ANSWER Defined as the cash or cash equivalent amount at the time
of a transaction
15.Financial - ANSWER FASB is acronym for "Financial" accounting
standards board.
16.Conservatism - ANSWER Results in the reporting of contingent losses, but
not contingent gains
17.Accrual - ANSWER Under the "Accrual" basis of accounting, revenues are
reported on the income statement in the period in which they are earned.
,18.Monetary - ANSWER Part of the "Monetary" unit assumption is that the
U.S. dollar retains its purchasing power over time
19.Cash Basis - ANSWER Revenues are reported on the income statement in
the period in which the cash is received from customers and expenses are
reported on the income statement when the cash is paid out
20.Accrual basis - ANSWER Revenues are reported on the income statement
when they are earned , Expenses are reported on the income statement in the
period when they occur
21.What is a basis point - ANSWER A basis point is a hundredth (1/100) of a
percentage point. One percentage point is equal to 100 basis points.
22.Margin of Safety - ANSWER Margin of safety is used in break-even
analysis to indicate the amount of sales that are above the break-even point.
In other words, the margin of safety indicates the amount by which a
company's sales could decrease before the company will become
unprofitable
23.The use of either of the two generally accepted methods of accounting
involves, to a greater or lesser extent, three key areas of estimates and
uncertainties - ANSWER The extent of progress towards completion,
contract revenues and contract costs
24.Percentage of method is considered preferable when: - ANSWER Estimates
of costs to complete and extent of progress toward completion of long term
contracts are reasonably dependable
, 25.Percentage of Completion and The completed contracts method - ANSWER
Both of the two generally accepted methods of accounting for contracts
26.Assets constructed and intended for sale or lease - ANSWER Qualifying
assets that warrant capitalization of interest
27.Statement of Position, Scope of: - ANSWER applies to accounting for
performance contracts for which specifications are provided by the customer
for the construction of facilities or the production of goods or the provisions
of related services that are reported in financial statements prepared in
conformity with generally accepted accounting principles.
28.Performance Bond - ANSWER A guarantee that the contractor will perform
the terms and conditions of the contract and that the project will be built
according to the plans and specifications.
29.In which phase of the contract life cycle does a contractor have the
opportunity to influence the contract terms and conditions - ANSWER
Contract Award
30.The Primary goal of an incentive compensation plan is to - ANSWER
Motivate group performance to achieve the company's identified goals
31.What is GAAP - ANSWER Generally Accepted Accounting Principles
32.Why Adhere to GAAP - ANSWER Accountants adhere to GAAP for
consistency, fairness, honesty and accuracy in measuring and disclosing
financial information
(Question with Verified Answers) |
Brand New Version
1. Percentage of Completion method: - ANSWER recognizes income as work
on a contract progresses
2. Completed Contract method: - ANSWER Recognizes income only when
the contract is completed
3. Units of delivery method: - ANSWER Recognizes as revenue the contract
price of units of a basic production product delivered during a period and as
the cost of earned revenue the costs allocable to the delivered units.
4. The units of delivery is a modification of the: - ANSWER percentage-of-
completion method of accounting for contracts
5. Monetary - ANSWER The "Monetary" unit assumption means transactions
of U.S. companies are reported in dollars
6. Matching - ANSWER Adjusting entries help to achieve the "Matching"
principle
7. Historical - ANSWER The cost principle is often described as the
"Historical" cost
,8. Industry - ANSWER "Industry" practices allows the format of public
utility's balance sheet to be different from that of a manufacturer
9. Materiality - ANSWER The concept of "Materiality" allows for the
violation of an accounting principle when the amounts are insignificant
10.Economic - ANSWER The "Economic" entity assumptions results in
business transactions being kept separate from a sole proprietor’s
11.Conservatism - ANSWER In case of uncertainty, less profit is reported
under this concept
12.Disclosure - ANSWER Full "Disclosure" is achieved through the notes to
the financial statements
13.Periodicity - ANSWER This assumption justifies quarterly financial
statements
14.Cost - ANSWER Defined as the cash or cash equivalent amount at the time
of a transaction
15.Financial - ANSWER FASB is acronym for "Financial" accounting
standards board.
16.Conservatism - ANSWER Results in the reporting of contingent losses, but
not contingent gains
17.Accrual - ANSWER Under the "Accrual" basis of accounting, revenues are
reported on the income statement in the period in which they are earned.
,18.Monetary - ANSWER Part of the "Monetary" unit assumption is that the
U.S. dollar retains its purchasing power over time
19.Cash Basis - ANSWER Revenues are reported on the income statement in
the period in which the cash is received from customers and expenses are
reported on the income statement when the cash is paid out
20.Accrual basis - ANSWER Revenues are reported on the income statement
when they are earned , Expenses are reported on the income statement in the
period when they occur
21.What is a basis point - ANSWER A basis point is a hundredth (1/100) of a
percentage point. One percentage point is equal to 100 basis points.
22.Margin of Safety - ANSWER Margin of safety is used in break-even
analysis to indicate the amount of sales that are above the break-even point.
In other words, the margin of safety indicates the amount by which a
company's sales could decrease before the company will become
unprofitable
23.The use of either of the two generally accepted methods of accounting
involves, to a greater or lesser extent, three key areas of estimates and
uncertainties - ANSWER The extent of progress towards completion,
contract revenues and contract costs
24.Percentage of method is considered preferable when: - ANSWER Estimates
of costs to complete and extent of progress toward completion of long term
contracts are reasonably dependable
, 25.Percentage of Completion and The completed contracts method - ANSWER
Both of the two generally accepted methods of accounting for contracts
26.Assets constructed and intended for sale or lease - ANSWER Qualifying
assets that warrant capitalization of interest
27.Statement of Position, Scope of: - ANSWER applies to accounting for
performance contracts for which specifications are provided by the customer
for the construction of facilities or the production of goods or the provisions
of related services that are reported in financial statements prepared in
conformity with generally accepted accounting principles.
28.Performance Bond - ANSWER A guarantee that the contractor will perform
the terms and conditions of the contract and that the project will be built
according to the plans and specifications.
29.In which phase of the contract life cycle does a contractor have the
opportunity to influence the contract terms and conditions - ANSWER
Contract Award
30.The Primary goal of an incentive compensation plan is to - ANSWER
Motivate group performance to achieve the company's identified goals
31.What is GAAP - ANSWER Generally Accepted Accounting Principles
32.Why Adhere to GAAP - ANSWER Accountants adhere to GAAP for
consistency, fairness, honesty and accuracy in measuring and disclosing
financial information
