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    Question

    In government project accounting (like infrastructure

    projects), revenue recognition may use percentage-of-completion method. Which of the following best describes that method?
    A Recognise revenue only on completion Correct Answer Incorrect Answer
    B Recognise a fixed proportion of contract value each year regardless of progress Correct Answer Incorrect Answer
    C Recognise revenue based on proportion of costs incurred to date to total estimated costs Correct Answer Incorrect Answer
    D Recognise revenue only if cash received Correct Answer Incorrect Answer
    E Recognise revenue as equal to billings Correct Answer Incorrect Answer

    Solution

    Percentage-of-completion recognises revenue proportionate to stage of completion (often cost-to-cost).

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