How should contract retention be treated in cash planning?

California C-10 exam practice question · Business Finances

How should contract retention be treated in cash planning?

As earned funds held pending release
BAs permanent profit with no collection risk
CAs a substitute for payroll reserves
DAs immediate unrestricted cash

Why A is correct

Retention delays cash even when revenue or cost has been recognized. Forecasts should reflect release timing, closeout conditions, disputes, and collection risk.

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How should contract retention be treated in cash planning?

How should contract retention be treated in cash planning?

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