Which of the following statements regarding the completed contract method is NOT true?
A) The company makes the same annual entries to record costs of construction, progress billings, and collections from customers as those under the percentage-of-completion method.
B) The company makes the same entries to recognize revenue as those under the percentage-of-completion method.
C) The company makes different entries to recognize revenue than under the percentage-of-completion method.
D) Losses on an unprofitable contract are immediately recorded.

Question

Quizplus · Accepted Answer

The completed contract method defers all revenue and profit recognition until the project is completed, which is different from the percentage-of-completion method where revenue and profit are recognized based on the progress of the construction project.

Which of the Following Statements Regarding the Completed Contract Method