Asked by christopher Neville on May 09, 2024
Verified
Under the percentage-of-completion method,the profit to be recognized in any year is based on the ratio of
A) incurred contract costs divided by estimated total contract costs.
B) incurred contract costs multiplied by estimated total contract costs.
C) estimated total contract costs divided by incurred contract costs.
D) estimated total contract costs multiplied by incurred contract costs.
Percentage-Of-Completion Method
An accounting method used to recognize revenues and expenses of long-term contracts in proportion to the work completed.
Contract Costs
Expenses directly related to securing and fulfilling a contract, including raw materials, labor, and overhead.
- Adopt the percentage-of-completion tactic for the recognition of income in extended-duration construction tasks.
Verified Answer
Learning Objectives
- Adopt the percentage-of-completion tactic for the recognition of income in extended-duration construction tasks.
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