Page 74 - Unanet GovCon Using Billing Revenue - Participant Guide ebook

10. For the Billing Type FP (Fixed Price), with a revenue recognition method
of When Billed, at what STEP of the billing process is revenue
recognized?
a) Billing & Revenue Post - This is an incorrect answer because revenue
is recognized for TM, CP, and FP projects that are not set to When
Billed
b) Generate a draft invoice - This is an incorrect answer because this
process is not a post and revenue is not recognized
c) Complete Invoice - This is the correct answer because revenue is
recognized when an invoice is completed for FP projects set to When
Billed

11. Indirect Costs are calculated based on the Indirect Cost Formula and
Indirect Rates in the Cost Structure. The System Admin Posting Option
Setup defines which Indirect Rate (Actual, Provisional, or Target) is to be
used to calculate the Billing and Revenue Recognition amounts for which
type of contract?
a) Fixed Price (FP) - This is an incorrect answer because indirect rates
are used in calculating CP projects
b) Cost Plus (CP) - This is the correct answer because indirect rates are
used in calculating CP projects
c) Time & Materials (TM) - This is an incorrect answer because indirect
rates are used in calculating CP projects

12. Cost Plus type contracts are typically billed at the Provisional rates, which
is the estimated rate submitted to an external agency such as Defense
Contract Management Agency (DCMA). What is the reason why this may
result in a difference between Billings and Revenue at the end of the
year?
a) Due to the different indirect rates used, as define by the System
Admin Posting Option Setup, between the Provisional rates for
Billings and Actual rates used to calculate Revenue Recognition
amounts - This is the correct answer because The System Admin
Posting Option Setup defines which Indirect Rate (Actual, Provisional,
or Target) is to be used to calculate the Billing and Revenue
Recognition amounts. If they are using difference rates it causes a
difference which should be reconciled at the end of the year
b) Due to the same indirect rate used for Billings and Revenue
Recognition amounts as define by the System Admin Posting Option -
This is an incorrect answer because the rate used is the same which
would not cause a difference

APPENDIX A: CHECK YOUR UNDERSTANDING ANSWER KEY
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