Asked by Aracelli Garcia on May 29, 2024
Verified
The percentage of completion ratio is determined by dividing costs incurred to date by the contract price.
Percentage Of Completion
An accounting method used to recognize revenues and expenses of long-term projects proportionally to the work completed to date.
Costs Incurred
Expenses recognized in accounting, representing the cost of doing business and acquiring or producing goods.
Contract Price
The agreed-upon price for goods or services specified in a contractual agreement.
- Acquire knowledge about the essential theories and implementations of the percentage-of-completion approach and completed contract approach in recognizing income.
Verified Answer
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Anthony DerasMay 30, 2024
Final Answer :
False
Explanation :
The percentage of completion ratio is determined by dividing costs incurred to date by the estimated total costs, not by the contract price.
Learning Objectives
- Acquire knowledge about the essential theories and implementations of the percentage-of-completion approach and completed contract approach in recognizing income.
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