When Comparing the Percentage-Of-Completion and Completed-Contract Methods of Accounting for Long-Term

question 67

Multiple Choice

When comparing the percentage-of-completion and completed-contract methods of accounting for long-term construction contracts,both methods will report the same

• A) balances each period in the Progress Billings account.
• B) expense for cost of construction each year.
• C) amount of income in the year of completion.
• D) inventory carrying value each year during the construction period.

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Definitions:

Log Transformation

A mathematical operation that replaces a variable with the logarithm of that variable to help normalize data or manage skewed distributions.

Arcsin Transformation

A data transformation technique used to stabilize the variance when the data follow a binomial distribution.

Categorical Variable

A variable that can take on one of a limited, and usually fixed, number of possible values, assigning each individual to a particular group or nominal category.

Quantitative Variable

A type of variable that represents measurable quantities and can be expressed in numeric values.