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:

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