Which Statement About the Percentage of Completion Method Is Correct

question 86

Multiple Choice

Which statement about the percentage of completion method is correct?

• A)This method recognizes revenue on a straight-line basis.
• B)This method can only be used if there are no uncertainties about how much the contract will cost or how long it will take to complete.
• C)This method allocates revenue, not construction costs.
• D)This method allocates construction costs, not revenue.

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Definitions:

Written Partnership Agreement

A legal document outlining the terms, responsibilities, and profit-sharing mechanisms among partners in a business.

Legal Obligation to Indemnify

A requirement by law for one party to compensate another for losses or damages that have been incurred.

Co-owners

Individuals or entities who jointly own an asset or property, sharing the rights and responsibilities associated with ownership.

Business for Profit

An enterprise or entity engaged in commercial, industrial, or professional activities with the aim of generating financial returns for its owners or shareholders.