Finance Flashcards

0
Q

What is EV?

A

EV is the value of work completed. It is the monetary value of the deliverables completed.

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1
Q

What does EV stand for?

A

Earned Value

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2
Q

What does SPI stand for?

A

Schedule Performance Index

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3
Q

What is SPI?

A

Schedule Performance Index is another Earned Value term to understand if the project is on schedule. SPI = EV / PV.
SPI reflects only the project-to-date performance for the rest of the project. It is expressed as a number or two-digit decimal such as
.85 or 1.01.

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4
Q

What does PC stand for?

A

Percent Complete

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5
Q

What does CPI stand for?

A

Cost Performance Index

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6
Q

What does SV stand for?

A

Schedule Variance

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7
Q

What is the formula for SV?

A

SV = EV - PV

Schedule Variance = Earned Value minus Planned Value (or budgeted amount)

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8
Q

What does CEAC stand for?

A

Calculated Estimate At Completion

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9
Q

What does EAC stand for?

A

Estimate At Completion

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10
Q

What does ETC stand for?

A

Estimate To Complete

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11
Q

What is an accrual?

A

If you book costs to the ledger, but there is no billing to match it, the amount is an accrual. Example: You had $28,040 in project costs that were booked to the current month, but the customer was not invoiced for it. This created a revenue accrual.

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12
Q

What is a revenue deferral?

A

A revenue deferral is the opposite of a revenue accrual. It is when revenue is billed but has not been earned. IBM: Cost deferrals must meet specific criteria and be approved.

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13
Q

What is the formula for CEAC?

A
CEAC = BAC / CPI
BAC = Budget At Completion
CPI = Cost Performance Index = Earned Value (EV) / Actual Cost (AC)
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14
Q

What is the formula for Gross Profit Margin

A

(1 - (cost / revenue)) x 100

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15
Q

In the term, POC Accounting, what does POC stand for?

A

Percentage Of Completion

16
Q

What is POC Accounting?

A

Percentage of completion, or POC, accounting is a method of revenue recognition that can be used for fixed-price contracts that are longer than 3 months when there is no client acceptance required for deliverables. Percentage of completion, rather than milestones is used for revenue recognition.