AB Ltd. has signed at 31st December, 2017 the Balance Sheet date, a contract where the Total Revenue is estimated at ` 15 Crores and Total Cost is estimated at ` 20 Crores. No work began on the contract. Is the Contractor required to give any accounting effect for the year ended 31st December, 2017?

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Recognize `15 Crores as Profit

TuteeHUB · Answer

Recognize expected loss of `5 Crores

TuteeHUB · Answer

No entry

TuteeHUB · Answer

None of the above

1.	AB Ltd. has signed at 31st December, 2017 the Balance Sheet date, a contract where the Total Revenue is estimated at ` 15 Crores and Total Cost is estimated at ` 20 Crores. No work began on the contract. Is the Contractor required to give any accounting effect for the year ended 31st December, 2017?
A.	Recognize expected loss of `5 Crores
B.	Recognize `15 Crores as Profit
C.	No entry
D.	None of the above
Answer» B. Recognize `15 Crores as Profit

AB Ltd. has signed at 31st December, 2017 the Balance Sheet date, a contract where the Total Revenue is estimated at ` 15 Crores and Total Cost is estimated at ` 20 Crores. No work began on the contract. Is the Contractor required to give any accounting effect for the year ended 31st December, 2017?

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