The method of reporting gross profit for long term contracts that does a better job of providing relevant information on the income statement is the ________.
A) completed-contract-method
B) installment sales method
C) cost recovery method
D) percentage-of-completion method

Question

Quizplus · Accepted Answer

The percentage-of-completion method recognizes revenue and expenses in proportion to the work completed, providing a more accurate reflection of financial performance over the duration of the contract.

The Method of Reporting Gross Profit for Long Term Contracts