The percentage-of-completion method that may be used to account for construction contracts can be justified on the basis that:
A) The contractor will be continuously working and therefore earning revenue.
B) In most long-term construction projects, payments are made periodically throughout the life of the contract allowing revenue to be recognised.
C) It is unreasonable to expect a contractor to record revenue only when construction is completed.
D) The contracting firm has a basis for measuring completion at particular interim dates.

Question

Quizplus · Accepted Answer

The percentage-of-completion method is based on the percentage of the project completed at particular interim dates, and the contracting firm can measure the completion based on the work done during that period. This justifies using this method to account for construction contracts.

The Percentage-Of-Completion Method That May Be Used to Account for Construction