The Theoretical Support for Using the Percentage-Of-Completion Method of Accounting

question 39

Multiple Choice

The theoretical support for using the percentage-of-completion method of accounting for long-term construction projects is that it

• A) is more conservative than the completed-contract method.
• B) produces a realistic matching of expenses with revenues.
• C) more closely conforms to the cost principle.
• D) reports a lower Net Income figure than the completed-contract method.

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Definitions:

AV Valve

Short for atrioventricular valve, it relates to the valves between the atria and ventricles of the heart that prevent backflow of blood.

Pulmonary Semilunar Valve

A heart valve that is a semilunar valve. It is situated between the right ventricle and the pulmonary trunk.

Right Ventricle

The lower right chamber of the heart that receives deoxygenated blood from the right atrium and pumps it into the lungs via the pulmonary artery.

Pulmonary Semilunar Valve

A valve in the heart located between the right ventricle and the pulmonary artery, preventing backflow of blood into the heart.