The percentage-of-completion and completed contract methods will produce different periodic income amounts, but the Accounts Receivable balances will be equal.

Question

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The percentage-of-completion method recognizes revenue as work is completed, while the completed contract method recognizes revenue only when the contract is complete. As a result, the Accounts Receivable balance will be equal under both methods, as it represents the amount of revenue that has been earned but not yet collected.

The Percentage-Of-Completion and Completed Contract Methods Will Produce Different Periodic