When Accounting for Revenue Over Time for a Long-Term Contract

question 252

Multiple Choice

When accounting for revenue over time for a long-term contract, the percentage of completion used to recognize revenue in the first year usually is determined by measuring:

• A) Costs incurred in the first year, divided by estimated remaining costs to complete the project.
• B) Costs incurred in the first year, divided by estimated total costs for the completed project.
• C) Costs incurred in the first year, divided by estimated gross profit.
• D) Costs incurred in the first year, divided by estimated total costs to be incurred in the remaining years of the project.

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Definitions:

U.S. Constitution

The foundational legal document establishing the framework of the federal government and outlining the rights of American citizens.

Private Property

Land or possessions owned by individuals or corporations rather than by the government or public as a whole.

Public Use

Utilization of land or property by the general public or government entities, often a criterion in eminent domain cases.

Landowners Downstream

Individuals or entities that own property located lower in the watershed or river flow, potentially affected by upstream activities.