- 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, ______
A. billings on construction contract are used in determining the percentage of the project completed to date.
B. accumulated construction costs can be used in determining the percentage of the project completed to date.
C. accumulated construction costs can be used in determining the percentage of the project completed in the current year.
Explanation: To use the percentage-of completion method, the firm must be able to estimate the portion of the contract that has been completed. One way to do this is to use the actual costs that have been incurred to date.
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