Under the percentage of completion method, the amount of work completed in a particular year is typically determined by comparing which of the following?
A) The costs incurred that year divided by the estimated total costs of the project.
B) The cost incurred that year divided by the contract price.
C) The total costs incurred to date divided by the contract price.
D) The total costs incurred to date divided by the cash collected to date from the customer.

Question

Quizplus · Accepted Answer

The percentage of completion method calculates the amount of work completed in a particular year by comparing the costs incurred that year to the estimated total costs of the project. This method helps in recognizing revenue and expenses in proportion to the work completed.

Under the Percentage of Completion Method, the Amount of Work