- CFA Exams
- CFA Level I Exam
- Study Session 7. Financial Reporting and Analysis (2)
- Reading 21. Understanding Income Statements
- Subject 3. Revenue Recognition in Special Cases
CFA Practice Question
Under the percentage of completion method, the amount of work completed in a particular year is typically determined by comparing ______.
B. the cost incurred that year divided by the contract price
C. the total costs incurred to date divided by the contract price
A. the costs incurred that year divided by the estimated total costs of the project
B. the cost incurred that year divided by the contract price
C. the total costs incurred to date divided by the contract price
Correct Answer: A
The percentage complete is usually determined by looking at the costs that are incurred. For a particular year, the percent would be the costs incurred that year divided by the estimated total costs of the contract.
User Contributed Comments 3
| User | Comment |
|---|---|
| kalps | costs incurred that year/ total estimated project costs |
| desertfox27 | oh god! i got it ALL right! |
| ldfrench | But you are a fox in the desert and you can't take the exam. |