Duro Brothers Ltd. is a construction company located in Toronto. The company is responsible for several large building complexes currently being constructed in the Toronto area. Total revenue and costs can be readily estimated and each contract is expected to take several years to complete. How is Duro most likely to recognize revenue?
A) percentage of completion method
B) equally over the term of the contract
C) at the time of contract signing
D) all revenue at the end of the job

Question

Quizplus · Accepted Answer

The percentage of completion method is the most appropriate method for recognizing revenue for construction companies like Duro Brothers Ltd. This method recognizes revenue based on the percentage of work completed, which is a more accurate reflection of the company's performance over time, rather than recognizing all revenue at the end of the job, at the time of contract signing, or equally over the term of the contract.