When Is Revenue Recognized Under the Percentage of Completion Method

question 4

Multiple Choice

When is revenue recognized under the percentage of completion method?

• A) Throughout the project, based upon the amount of cash received from the customer.
• B) When construction begins on the project.
• C) When the project is complete.
• D) Throughout the project, based upon the amount of work completed each year.

---

Definitions:

Production

The process of creating, manufacturing, or enhancing goods and services.

Special Order

An order that is outside of a company's normal production that typically requires special pricing, terms, and conditions.

Sales Price

The amount of money charged for a product or service in the market.

Current Profits

The amount of net income that a company has generated during the current fiscal period, reflecting its financial performance in the short term.