Home › CBSE Class 11 (Commerce) › Accountancy › Theory Base of Accounting › For a construction contract lasting 2 to 3 years…
For a construction contract lasting 2 to 3 years, how is revenue treated as realised?
AOn the first payment
BOnly on final handover
COn signing the contract
DAs work gets completed
Answer & Solution
Correct answer: D. As work gets completed
For long contracts, revenue is recognised proportionately to the part of the contract finished by period end.
Related questions
In accounting, what does the term 'convention' connote?What do Generally Accepted Accounting Principles aim to bring?Which existing tax was subsumed under CGST?Which GST component also covers imports of goods and services?Goods moved from Madhya Pradesh to Rajasthan attract which GST?Taxes collected under CGST form the revenue of whom?Who ultimately bears the burden of GST?GST is a tax based on which principle?