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.

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Definitions:

Forging Process

A manufacturing procedure where metal is shaped by localized compressive forces, often through hammering or pressing.

Lower Control Limit

The lowest value on a control chart that signals the process variation if the data falls below it.

Compressive Strength

Compressive strength is a measure of the ability of a material to withstand loads tending to reduce size, typically expressed in pounds per square inch (psi) or mega pascals (MPa).

Center Line

A reference line in a chart or graph that represents the average or median of the data points.