Question

In Contract Costing credit is taken only for a
part of the profit in case of_______
a.Completed Contract
b.Incomplete Contract
c.Work Uncertified
d.Work Certified​

Answer 1

Answer:

INCOMPLETE CONTRACT

Explanation:

ANSWER IS B

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Answer 2

In Contract Costing credit is taken only for a part of the profit in case of Incomplete Contract.

Explanation:

• When a contract isn't completed, the loss is entirely transferred to the profit and loss account.
• When a contract account for an incomplete contract indicates profit, it should be viewed as 'Notional profit' rather than profit earned. There is uncertainty about material prices and pay rates.
• Natural disasters such as rain and floods might result in contract losses.
• As a result, a conservative policy of making provisions for contingencies and crediting the balance of notional profit to the P & L A/c is frequently followed.