The Percentage-Of-Completion Method Violates the General Rule for Revenue Recognition

question 43

True/False

The percentage-of-completion method violates the general rule for revenue recognition that the earnings process is complete.

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Definitions:

Merger Clause

A clause in a written agreement within the statute of frauds that states that the written agreement accurately reflects the final, complete version of the agreement.

Statute of Frauds

A legal principle that requires certain types of contracts to be written and signed to be enforceable.

Obligor's Consent

The necessary agreement or permission from the party obligated to perform under a contract or legal duty.

Parol Evidence Rule

A legal principle that prohibits the use of oral or written statements made prior to or at the time of a written contract to change or contradict the terms of the contract.