The principal advantage of the completed-contract method in accounting for long-term construction contracts is that reported income is based on final results rather than on estimates of unperformed work.

Question

Quizplus · Accepted Answer

The completed-contract method defers all revenue and expense recognition until a contract is fully completed, thus basing reported income on actual, final results rather than on estimates of unperformed work, which can be subject to significant changes.

The Principal Advantage of the Completed-Contract Method in Accounting for Long-Term