The Percentage-Of-Completion Method That May Be Used to Account for Construction

question 75

Multiple Choice

The percentage-of-completion method that may be used to account for construction contracts can be justified on the basis that:

• A) The contractor will be continuously working and therefore earning revenue.
• B) In most long-term construction projects, payments are made periodically throughout the life of the contract allowing revenue to be recognised.
• C) It is unreasonable to expect a contractor to record revenue only when construction is completed.
• D) The contracting firm has a basis for measuring completion at particular interim dates.

---

Definitions:

Share Valuation Models

Techniques or methods used to estimate the fair value of a company's shares, such as the Dividend Discount Model or the Discounted Cash Flow method.