The percentage-of-completion method must be used when certain conditions exist. Which of the following is not one of these necessary conditions?
A) Estimates of progress toward completion, revenues, and costs are reasonably dependable.
B) The contractor can be expected to perform the contractual obligation.
C) The buyer can be expected to satisfy some of the obligations under the contract.
D) The contract clearly specifies the enforceable rights of the parties, the consideration to be exchanged, and the manner and terms of settlement.

Question

Quizplus · Accepted Answer

The percentage-of-completion method does not require the buyer to satisfy any obligations under the contract. The necessary conditions for using this method are that estimates of progress, revenues, and costs are reasonably dependable, the contractor can be expected to perform the obligation, and the contract specifies enforceable rights, consideration, and settlement terms.

The Percentage-Of-Completion Method Must Be Used When Certain Conditions Exist