Which Formula Explains How Gross Profit Is Recognized When an Overall

question 49

Multiple Choice

Which formula explains how gross profit is recognized when an overall loss is expected on the contract under the percentage completion method?

• A)Cost incurred / Estimated total cost.
• B)(Cost incurred / Estimated total cost)× Contract revenue - Revenue previously recognized.
• C)(Cost incurred / Estimated total cost)× Estimated total cost - Cost of sales previously recognized.
• D)100% × (Estimated gross loss)- (Gross profit/loss previously recognized).