Question

52. In Contract, cash received is equal to
a) Work certified - retention money
b) Contract price
c) Work certified + work uncertified
d) Contract price - work certified​

Answer 1

Answer:

a..........................

Answer 2

The correct option for the given question is Option A) Work certified - retention money.

Explanation:

• In the contract, the recipients is equal to the work that is certified, the retention money is equal to the sum of the payments in excess of the work that has been certified.
• On the contrary, it is possible to create a contract that does not guarantee a certain amount of profit. This could be done through a cost-sharing arrangement that requires the client to share the cost of the product. The product itself is usually sold with a guarantee price.
• Retention money is not actually profit, but is the money the company pays or keeps a deposit for a new customer.  In this example, $1000 retention money is equal to $1000 earned from a new customer.
• In Contract, the cash received from work certified is not kept by the certified person, as such the person certifies work in Contract and gets a percentage of the money received as a retention fee; the certified person then deducts this amount from the cash received.