The Theoretical Support for Using the Percentage-Of-Completion Method of Accounting

question 39

Multiple Choice

The theoretical support for using the percentage-of-completion method of accounting for long-term construction projects is that it

• A) is more conservative than the completed-contract method.
• B) produces a realistic matching of expenses with revenues.
• C) more closely conforms to the cost principle.
• D) reports a lower Net Income figure than the completed-contract method.

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Definitions:

Anticipate

To look forward to or expect a future event or outcome, often making preparations in advance.

Convention Centre

A large facility used for hosting conferences, conventions, trade shows, and other large events, offering ample space and amenities to accommodate attendees.

Motives

Internal states or desires that energize and direct behavior towards specific goals.

Expectations

Beliefs or anticipations about the way events, behaviors, or things should be in the future.