At the end of a given long-term construction project,"retained earnings" will be the same regardless of whether the construction company uses the completed contract method or the percentage-of-completion method when accounting for the project.

Question

Quizplus · Accepted Answer

Retained earnings represent the cumulative profits of a company that have not been distributed as dividends. Accounting methods for a construction project may impact the timing of revenue recognition and expenses, but ultimately the profits or losses from the project will be reflected in retained earnings. Therefore, the method used does not affect retained earnings at the end of the project.

At the End of a Given Long-Term Construction Project,"retained Earnings