When Both the Total Profit on the Contract and the Progressive

question 66

Multiple Choice

When both the total profit on the contract and the progressive degree of completion during construction can be reliably estimated,a construction firm should record income on a long-term construction project using the:

• A)percentage of completion method.
• B)sales method.
• C)instalment method.
• D)collection method.

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Definitions:

Net Operating Income

The profit generated from a company's operational activities, excluding non-operational revenues and expenses.

Flexible Budget

An evolving budget that adjusts to differences in volume or the degree of activity.

Tenant-Days

A metric used in real estate to measure the total number of days tenants occupy a space, often used in the management of rental properties.

Net Operating Income

The profit generated from a company's normal business operations, calculated as revenues minus operating expenses, excluding interest and taxes.