The Percentage-Of-Completion Method Must Be Used When Certain Conditions Exist

question 124

Multiple Choice

The percentage-of-completion method must be used when certain conditions exist. Which of the following is not one of these necessary conditions?

• A) Estimates of progress toward completion, revenues, and costs are reasonably dependable.
• B) The contractor can be expected to perform the contractual obligation.
• C) The buyer can be expected to satisfy some of the obligations under the contract.
• D) The contract clearly specifies the enforceable rights of the parties, the consideration to be exchanged, and the manner and terms of settlement.

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Definitions:

Output

The quantity of products or services generated by a business, sector, or economic system over a certain timeframe.

Wage

Compensation or payment to an employee for labor or services rendered, typically expressed on an hourly, daily, or piecework basis.

Marginal Product

The additional output resulting from the use of one more unit of a production input, holding other inputs constant.

Wage

A wage is the compensation paid to employees for their labor, typically calculated on an hourly, daily, or piecework basis.