How is revenue recognized on a cost plus 7% contract?
A)Revenue is recognized only after the contract is completed.
B)Revenue and expenses are recognized in proportion to the degree of progress.
C)Record an amount of revenue equal to the costs that are expected to be recovered on the contract.
D)Revenue equal to the cost plus 7% profit will be recorded each year.

Question

Quizplus · Accepted Answer

In a cost plus 7% contract, revenue is recognized each year as the costs incurred plus the agreed-upon profit margin, which in this case is 7%.

How Is Revenue Recognized on a Cost Plus 7% Contract