Basics Questions On Government Contracting
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This short quiz is to access your basic knowledge on government contract accounting.
Questions and Answers
- 1.
Commercial contracts focus on making money while the government contracts want to save it.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Commercial contracts are agreements between businesses or individuals that are primarily aimed at generating profits and maximizing financial gains. On the other hand, government contracts involve agreements between the government and other parties, such as businesses or individuals, with the goal of providing goods or services to the government or its constituents while ensuring cost-effectiveness and savings of taxpayer money. Therefore, the statement accurately reflects the difference in focus between commercial and government contracts, making the answer "True."Rate this question:
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- 2.
Below are the responsibilities of DCAA. Choose applicable:
- A.
Primary auditor of government contracts
- B.
Concentrate on the contractor's operations
- C.
Focuses only the contracts they award
Correct Answer(s)
A. Primary auditor of government contracts
B. Concentrate on the contractor's operationsExplanation
The DCAA, or Defense Contract Audit Agency, has the responsibility of being the primary auditor of government contracts. This means that they are responsible for conducting audits and reviews of contracts awarded by the government. Additionally, the DCAA also focuses on the contractor's operations, ensuring that they are in compliance with regulations and guidelines. This includes examining the contractor's financial and accounting systems, as well as assessing the contractor's internal controls. By concentrating on the contractor's operations, the DCAA aims to ensure that government contracts are being executed efficiently and effectively.Rate this question:
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- 3.
It is a type of contract awarded where acquisition of service is based on direct labor hours and cost of materials.
- A.
Firm Fixed Price
- B.
Time and Materials
- C.
Cost Plus Fixed Fee
Correct Answer
B. Time and MaterialsExplanation
Time and Materials is the correct answer because this type of contract is based on the direct labor hours and the cost of materials. In this type of contract, the buyer pays the supplier for the actual hours worked by the supplier's employees, as well as for the cost of the materials used in the project. This type of contract is commonly used when the scope of work is uncertain or when the buyer wants more control over the project's progress and costs.Rate this question:
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- 4.
A CPFF contract is also known as cost reimbursable contract that provides payment to contractor at a negotiated ______.
Correct Answer
feeExplanation
A CPFF contract, also known as a cost reimbursable contract, provides payment to the contractor at a negotiated fee. In this type of contract, the contractor is reimbursed for the actual costs incurred during the project, and in addition, they receive a fee that is predetermined and agreed upon in the contract. This fee is usually a percentage of the total costs or a fixed amount, and it serves as the contractor's profit or compensation for their services.Rate this question:
- 5.
Generally Accepted Accounting Principles (GAAP) applies when FAR and CAS are silent.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Generally Accepted Accounting Principles (GAAP) is a set of accounting standards and guidelines that are widely accepted and used by companies in the United States. When the Federal Acquisition Regulation (FAR) and the Cost Accounting Standards (CAS) do not specifically address a particular accounting issue, GAAP is applied. This means that in the absence of specific guidance from FAR and CAS, companies should follow GAAP to ensure consistency and accuracy in their financial reporting. Therefore, the statement "Generally Accepted Accounting Principles (GAAP) applies when FAR and CAS are silent" is true.Rate this question:
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- 6.
What are the benefits of using GCS Premier as your government contract accounting solution?
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