The percentage-of-completion method must be used when certain conditions exist. Which of the following is not one of those 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 focuses on the ability to make reliable estimates of progress, costs, and revenues, the enforceability of the contract, and the contractor's ability to complete the obligation. The expectation that the buyer will satisfy some of the obligations under the contract is not a necessary condition for using this accounting method.

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