When accounting for revenue for a long-term contract, the percentage of completion used to recognize revenue in the first year usually is determined by measuring ________.
A) costs incurred in the first year, divided by estimated remaining costs to complete the project
B) costs incurred in the first year, divided by estimated total costs for the completed project
C) costs incurred in the first year, divided by estimated gross profit
D) costs incurred in the first year, divided by estimated total costs to be incurred in the remaining years of the project

Question

Quizplus · Accepted Answer

The percentage of completion method recognizes revenue based on the proportion of costs incurred to date compared to the estimated total costs for the entire project.

When Accounting for Revenue for a Long-Term Contract, the Percentage