The practical difference between an allowance and a contingency is that:
Correct Answer
B) An allowance carries money for a defined item not fully selected, while contingency covers defined risk under contract rules
An allowance is a stated amount for a defined item not fully selected or priced; contingency is a reserve for risks or costs allowed by the contract. Other choices merge or misstate the terms.
Why This Is the Correct Answer
An allowance is a stated amount for a defined item not fully selected or priced; contingency is a reserve for risks or costs allowed by the contract. Other choices merge or misstate the terms.
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