CFA Practice Question

CFA Practice Question

Under the Percentage-of-completion method of recognizing contract revenue, common methods of estimation of completion include all of the following except:
A. Ratio of profits of the company year to date to expected profits for the year of the company.
B. Ratio of costs incurred by expected total costs.
C. Ratio of units delivered to total units expected to be delivered.
Explanation: This method attempts to match expenses with revenues and profits. Revenues recognized would not be based on the expected profits for the company during the year.

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