Consider a Project That Was Correctly Accounted for Under the Percentage-Of-Completion

question 57

Multiple Choice

Consider a project that was correctly accounted for under the percentage-of-completion method.At the end of the project, the construction in process account includes total debits and credits of $3.5 Mill.Assuming that gross profit of $1.2 Mill.was recognized throughout the contract, total constructions costs were:

• A)$2.3 Mill.
• B)$3.5 Mill.
• C)$2.1 Mill.
• D)$4.6 Mill.

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Definitions:

Profit-Oriented Business

A business that operates with the primary goal of earning revenue in excess of its operating costs.

Deferral Method

An accounting technique that involves postponing the recognition of certain revenues or expenses until a later accounting period.

Programmatic Reporting

Reporting focused on the outcomes and impacts of programs, often related to policy or service implementations.

Endowment Contribution

A donation made to an organization with the stipulation that the principal is to remain intact in perpetuity or for a defined period, generating income for use.