Question

If contract is 40% complete, credit taken to profit & loss a/c is _________
A) 40% of notional profit
B) 1/3rd of notional profits, reduced in ratio of cash received to work certified
C) zero
D) 2/3rd of notional profits, reduced in ratio of cash received to work certified​

Answer 1

Answer:

c

Explanation:

add me brinaly ans zero

Answer 2

Introduction:

Mostly in situation of an unfinished contract, it is not preferable to transfer the entire earnings to the profit and loss account since there is a possibility of an increase in the cost of raw materials or labour the following year.

Explanation:

If somehow the contract is less than half (26 percent -50 percent) of the notional profit in proportion to cash received and work certified, the profit & loss account will be transferred.

Therefore, the correct option is B.