When the completion stage of the contract is more than half, the profit to be credited to Profit and Loss account will be equal to…………..
A)1/3rd of notional profit x cash received work certified
B)½ of notional profit x cash received work certified
C)2/3rd of notional profit x cash received work certified
D)full notional profit.

Question

Quizplus · Accepted Answer

When the completion stage of the contract is more than half, it is common to credit 2/3rd of the notional profit multiplied by the ratio of cash received to work certified to the Profit and Loss account. This method helps in recognizing revenue in a way that reflects the work completed, especially in long-term contracts.

When the Completion Stage of the Contract Is More Than