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).

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Definitions:

Vitamin

Organic substance that is essential for normal body growth and maintenance and resistance to infection.

Closing Entries

At the close of an accounting period, recordings are made to move balances from temporary accounts to those that are permanent.

Adjustment Columns

Special columns found in accounting ledgers and worksheets used for making necessary modifications to accounts at the end of a reporting period.

Depreciation Expense

The cost allocated over the useful life of a tangible asset to account for its decline in value due to use and time.