The revenue recognition method most often used for short-term construction projects is to recognize revenue:
A)during the construction process as a percentage of the costs completed.
B)at the completion of the project.
C)at the time the construction contract is signed.
D)as cash is received.

Question

Quizplus · Accepted Answer

The most appropriate revenue recognition method for short-term construction projects is to recognize revenue at the completion of the project. This is because in short-term construction projects, the outcome of the project can be more accurately estimated and there is less risk associated with the completion of the project. Therefore, recognizing revenue at the completion of the project provides a more accurate reflection of the project's profit or loss.

The Revenue Recognition Method Most Often Used for Short-Term Construction