The Percentage-Of-Completion Method

question 47

Multiple Choice

The percentage-of-completion method

• A)is affected by the actual schedule of cash collection.
• B)cannot be used if the contract specifies that the contractor will receive the entire contract price only on completing construction.
• C)measures the proportion of total work carried out during the accounting period either from engineers' estimates of the degree of completion or from the ratio of costs incurred to date to the total costs expected for the entire contract.
• D)is not a method allowed by U.S.GAAP.
• E)none of the above.

---

Definitions:

Expected Rate

An anticipated return on investment, interest rate, or growth rate based on historical data, market analysis, or other predictive models.

Probability

This refers to the likelihood of occurrence of an uncertain event, often expressed as a number between 0 and 1.

Narrowest Bell Curve

Describes a distribution with a high peak and steep sides, indicating that the data points cluster closely around the mean, showing low variability.

Large-company Stocks

Equities issued by corporations with a large market capitalization, often considered more stable investments than those of smaller companies.