The percentage-of-completion method
A) is used in valuing inventories.
B) is applicable for long-term construction projects.
C) must be used by all companies.
D) should only be used if reliable estimates of total costs are not available.

Question

Quizplus · Accepted Answer

The percentage-of-completion method is primarily used for recognizing revenue and expenses related to long-term construction projects. This method allows companies to record revenue and expenses in proportion to the work completed during the period, which is particularly useful for projects that span over multiple accounting periods.

The Percentage-Of-Completion Method