Under the percentage-of-completion contract method
A) revenue and cost are recognized during the production cycle, but gross profit recognition is deferred until the contract is completed.
B) revenue, cost, and gross profit are recognized during the production cycle.
C) revenue, cost, and gross profit are recognized at the time the contract is completed.
D) none of these

Question

Quizplus · Accepted Answer

Under the percentage-of-completion method, revenue, costs, and gross profit are recognized throughout the production cycle based on the progress towards completion of the contract.

Under the Percentage-Of-Completion Contract Method