When is revenue recognized under the completed contract method?
A)when construction begins on the project.
B)when the project is complete.
C)throughout the project as cash payments are received from the customer.
D)throughout the project as bills are sent to the customer.

Question

Quizplus · Accepted Answer

Revenue is recognized only when the contract is complete under the completed contract method. Until completion, costs related to the project are accumulated on the balance sheet as work-in-progress. This method is generally used when there is a high level of uncertainty about the cost of completing the project or the collection of payments.

When Is Revenue Recognized Under the Completed Contract Method