Under private entity GAAP, the profession requires that the percentage-of-completion method be used when certain conditions exist.Which of the following is not one of those necessary conditions?
A)Estimates of progress toward completion, revenues, and costs are reasonably dependable.
B)The contractor can be expected to perform the contractual obligation.
C)The buyer can be expected to satisfy some of the obligations under the contract.
D)The contract clearly specifies the enforceable rights of the parties, the consideration to be exchanged, and the manner and terms of settlement.

Question

Quizplus · Accepted Answer

The necessary conditions for using the percentage-of-completion method under private entity GAAP include: estimates of progress, revenues, and costs being reasonably dependable; the contractor being able to perform the contractual obligation; the contract clearly specifying enforceable rights of the parties, consideration to be exchanged, and settlement terms. The buyer's ability to satisfy some obligations under the contract is not a necessary condition.

Under Private Entity GAAP, the Profession Requires That the Percentage-Of-Completion