Under the completed-contract method,
A) revenue, costs, and gross profit are recognized during the contract.
B) revenue and costs are recognized during the contract, but gross profit recognition is deferred until the contract is completed.
C) costs are recognized during the contract, but revenue and gross profit are not.
D) revenue, costs and gross profit are not recognized until the contract is finished.

Question

Quizplus · Accepted Answer

Under the completed-contract method, revenue, costs, and gross profit are not recognized until the contract is finished. All revenue, costs, and gross profit are deferred until the project is completed. At that point, all the revenue, costs, and gross profit are recognized and recorded in the financial statements.

Under the Completed-Contract Method