Which Statement Best Explains the Percentage of Completion Method

question 50

Multiple Choice

Which statement best explains the percentage of completion method?

• A)An accounting method that recognizes revenue and expenses on a contract only after it is completed.
• B)An accounting method that recognizes revenue and expenses on a contract in proportion to the degree of progress.
• C)An accounting method that recognizes an amount of revenue equal to the costs that are expected to be recovered on the contract.
• D)An accounting method that recognizes revenue and expenses based on the fair value of the contract.

---

Definitions:

Performance Opportunity

A situation that offers the chance for a better future if the right steps are taken.

Performance Results

The outcomes or outputs produced by an individual, team, or organization, measured against intended goals or standards.

Effective Control

The process of ensuring that organizational activities are proceeding as planned and correcting any significant deviations.

Measurement of Results

The process of quantitatively and qualitatively assessing the outcomes of an action or event, to determine the extent to which objectives and goals have been achieved.