Using the Percentage-Of-Completion Method for Recognising Profit on a Construction

question 7

Multiple Choice

Using the percentage-of-completion method for recognising profit on a construction contract is advisable in situations where:

• A) future costs are likely to fluctuate substantially
• B) the ability of either party to the contract to satisfy the terms of the contract is unknown
• C) the contract price is clearly specified in a non-cancellable contract
• D) the percentage-of-completion method is not advisable in any of the above situations