Project Accounting Course Instructions and Final Examination Project Accounting Steven M. Bragg CPE Edition Distributed by The CPE Store www.cpestore.com 1-800-910-2755 The CPE Store 819 Village Square Drive Tomball, TX 77375 1-800-910-2755
Project Accounting Table of Contents Page Course Objectives... 3 Course Instructions... 3 Final Examination... 5
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Course Objectives After completing this course, you will be able to: Identify project characteristics Recognize the aspects of a project that cost plus pricing adds a markup percentage to Determine when the cost-to-cost method can yield incorrect profit recognition Discern why the fee for a performance bond is considered a direct cost Determine what happens to the cost to obtain a contract when it is capitalized Recognize when to use an allowance in a project accounting environment Determine when, and under what circumstances, to discontinue capitalizing interest Recognize when/why, under a dependent completion scenario, you should terminate interest capitalization Identify which stage of internal-use software development can be capitalized Recognize what costs can be charged to expense when developing a website, rather than being capitalized Ascertain why the establishment of cost definitions is needed Determine why documentation of the percentage of completion method is necessary Recognize an item for which a progress measurement may be included in a project monitoring plan Identify what factors should be used to calculate the breakeven point of a project Recognize how to calculate free cash flow Course Instructions To fully benefit from this course, please follow all of the steps below. 1. Read each chapter in the text to get a good understanding of the material. 2. Answer the study guide problems which appear at the end of each chapter. After answering the problems, compare your answers with the correct answers to ensure that you understand the material. 3. When you feel that you have a good understanding of the material contained in the chapter, answer the questions on the final examination. 4. When you have completed the final examination, record your answers on the answer sheet provided and submit it for grading. A score of 70% or better is required to pass. Please also complete the course evaluation and submit it to us along with your answer sheet. Upon passing you will receive a Certificate of Completion stating that you have successfully completed the course and earned the continuing education credit. Prerequisites and Advance Preparation No prerequisites or advance preparation are required for this course. CPE Credit This course is recommended for 3 CPE credits. Final Exam Grading Online: By Mail: Our fastest option, with instant results. Simply go to www.cpestore.com and click the link for online grading. Just follow the instructions from there. When you finish entering your answers, you ll receive instant test results and a Certificate of Completion to print. Mail your test and course evaluation to us. We grade the tests the day we receive them and mail the results and Certificate of Completion to you the following business day. - 3 -
By Fax: Just fax your answer sheet to 1-281-255-4337. If you need us to fax the Certificate of Completion back to you, please provide us with your fax number and write please fax back on your answer sheet. If you don t need the Certificate faxed back, please write no fax needed on your answer sheet. Refunds The CPE Store guarantees your satisfaction. If, for any reason, you are not completely satisfied with your purchase, return it to us unused within 30 days for a prompt refund, no questions asked. (Sorry, but shipping fees are not refundable.) Customer Service The CPE Store holds itself to the highest standards. If we have not met your expectations, something is missing, or you just have a question please contact us at 1-800-910-2755 or customerservice@cpestore.com. About Our Courses The CPE Store s courses are developed to satisfy the continuing education requirements of the American Institute of Certified Public Accountants, each state s Board of Accountancy and the National Association of State Boards of Accountancy (NASBA). If your state requires registration of sponsors, our sponsor number will appear on your Certificate of Completion. Our courses are designed to meet the continuing education requirements of accounting professionals. A great deal of care has been taken to ensure that the course material is both interesting and relevant to the practice of accounting. The information presented is, to the best of our knowledge, current and accurate. However, The CPE Store is not in the business of rendering legal, accounting or other professional advice and as such, the material presented in our courses is intended as an overview. If legal advice or other expert assistance is required, the services of a competent professional should be sought. - 4 -
Project Accounting 3-Credit Course Final Examination A score of 70% or higher is required to pass the exam. If you score less than 70% on your first attempt, we will allow you to take the test a second time. Chapter 1 Overview of Project Accounting 1. Which of the following is a characteristic of a project? A. There is a clear start date B. The output is unique C. Activities are seasonal D. Production runs are small Chapter 2 Project Pricing, Billing and Revenue 2. Cost plus pricing adds a markup percentage to: A. Direct labor only B. Direct costs and allocated overhead C. Direct materials and allocated overhead D. Direct materials only 3. The cost-to-cost method can yield incorrect profit recognition when: A. There is an error in the number of machine hours recorded B. Several of the units delivered to the customer are returned C. The completion of a milestone has been falsely reported D. The calculation includes the cost of items purchased but not yet installed Chapter 3 Project Costs 4. The fee for a performance bond is considered a direct cost because: A. It would not be incurred if the related project did not exist B. It is an investment fee related to the funding for a specific project C. It is required by the customer D. It would otherwise be considered part of corporate overhead 5. When the cost to obtain a contract is capitalized, it is then over the life of the contract. A. Depreciated B. Amortized C. Depleted D. Impaired Chapter 4 Project Cost Management 6. An allowance is used in a project accounting environment when: A. The budget is derived with a high level of precision B. There are few uncertainties involved in the formulation of costs to be incurred C. Company managers are specifically pursuing projects with a very high projected level of profitability D. A more specific determination of a cost cannot be made - 5 -
Final Exam Chapter 5 Interest Capitalization 7. You should not continue to capitalize interest if: A. Interest costs are not being incurred B. Construction interruptions have been imposed by an outside entity C. There is a brief construction interruption D. There are delays that are an inherent part of the asset acquisition process 8. Under a dependent completion scenario, you should only terminate interest capitalization when: A. A discrete part of a project has been completed B. A separate but related project has also been completed C. No additional interest cost is being incurred D. An entire unit has been completed Chapter 6 Additional Project Accounting Topics 9. The stage of internal-use software development that can be capitalized is: A. Preliminary planning B. Application development C. Subsequent use D. Post-implementation 10. When developing a website, which of the following can be charged to expense (rather than being capitalized)? A. Graphics development B. Internet domain registration C. Data conversion costs D. Code customization Chapter 7 Project Controls 11. The establishment of cost definitions is needed in order to: A. Determine which costs should be included in a cost pool for allocation to a project B. Ensure that all project income statements have the same line items C. Ensure that costs are tested for materiality D. Decide which costs are associated with which suppliers 12. Documentation of the percentage of completion method is needed to: A. Determine when a project is closed in the accounting system B. Ensure that customer bills are sent out on time C. Standardize the calculation of the percentage of completion D. Ensure that the correct milestone bonuses are paid 13. A project monitoring plan might include a progress measurement for: A. The remaining hours required to complete a project B. The amount of accountant staff hours charged to a project C. The amount of overtime charged to a project D. The number of times the expected outcome has been changed Chapter 8 Project Measurements 14. To calculate the breakeven point of a project, divide total fixed expenses by the: A. Gross margin percentage B. Contribution margin percentage C. Operating margin percentage D. Net profit percentage - 6 -
Final Exam 15. When calculating free cash flow, is subtracted from operating cash flows. A. The cost of capital B. Income taxes C. Depreciation and amortization D. Capital expenditures Thank you for taking our course. We hope you enjoyed it. - 7 -
Project Accounting Course Number: AA151301 Qualifies for 3 hours of CPE credit Name as it should appear on your Certificate: License State(s): License Number: Date Course Completed: If you are mailing or faxing your test to us for grading, please fill in Member ID and Validation number. Where should we send your results? * Answer each question A, B, C, or D as appropriate. * Be sure you are answering questions from the Final Examination, not from the Study Guide * For instant online grading, go to www.cpestore.com and click the link for Online Services 1. 4. 7. 10. 13. 2. 5. 8. 11. 14. 3. 6. 9. 12. 15. Page 1 of 1
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