Use the information below to answer the following questions:
The profit for a particular project of Blue Fin Ltd, using the percentage of completion method, was $470 000 for year 1 and $690 000 for year 2 (completion).
-What difference would there be to the total profit for two years if the completion of production method were used?
A) Profit would be $1 160 000 higher.
B) Profit would be $690 000 higher.
C) Profit would be $470 000 higher.
D) There would be no difference.

Question

Quizplus · Accepted Answer

The total profit over the two years would remain the same regardless of the method used, as both methods ultimately recognize the same total profit by the end of the project.

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