Under the Percentage-Of-Completion Contract Method

question 47

Multiple Choice

Under the percentage-of-completion contract method

• A) revenue and cost are recognized during the production cycle, but gross profit recognition is deferred until the contract is completed.
• B) revenue, cost, and gross profit are recognized during the production cycle.
• C) revenue, cost, and gross profit are recognized at the time the contract is completed.
• D) none of these

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Definitions:

Misrepresentation Liability

Legal responsibility arising from providing false or misleading statements that someone else relies on to their detriment.

Negligently

Acting with a lack of care or attention to duty that results in harm or damage.

Rescind

To rescind means to revoke, cancel, or annul a contract, agreement, or resolution, effectively making it as though it never existed.

Rely

Depend on or trust in something or someone for support or maintenance.