When the Percentage-Of-Completion Method of Accounting for Long-Term Construction Projects

question 65

Multiple Choice

When the percentage-of-completion method of accounting for long-term construction projects is used,why is Construction in Progress increased by the annual recognized gross profit on long-term construction contracts?

• A) The cost of the contract has increased.
• B) The project's value has increased above cost.
• C) The economy experiences inflation over the construction period.
• D) Construction in Progress is not increased by the annual recognized profit.

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