The percentage-of-completion method
A)is affected by the actual schedule of cash collection.
B)cannot be used if the contract specifies that the contractor will receive the entire contract price only on completing construction.
C)measures the proportion of total work carried out during the accounting period either from engineers' estimates of the degree of completion or from the ratio of costs incurred to date to the total costs expected for the entire contract.
D)is not a method allowed by U.S.GAAP.
E)none of the above.

Question

Quizplus · Accepted Answer

The percentage-of-completion method measures the proportion of total work carried out during the accounting period either from engineers' estimates of the degree of completion or from the ratio of costs incurred to date to the total costs expected for the entire contract. It is not necessarily affected by the actual schedule of cash collection, and it can be used even if the contract specifies that the contractor will receive the entire contract price only on completing construction. It is an acceptable method under U.S.GAAP.

The Percentage-Of-Completion Method