The percentage of completion method recognizes revenue:

A Only when the project is done

B Proportionally as work progresses based on costs incurred vs. estimated total costs

C When cash is received

D At contract signing

✓ Correct Answer: Option B

% completion: Revenue = (costs incurred / estimated total costs) × total contract price. Revenue recognized over time as work progresses.

💡 Why is B) the correct answer?

The correct answer to the question "The percentage of completion method recognizes revenue:" is Option B: Proportionally as work progresses based on costs incurred vs. estimated total costs.

The other options — A) Only when the project is done, C) When cash is received, D) At contract signing — are incorrect for this CPA Exam Prep question. As explained above: % completion: Revenue = (costs incurred / estimated total costs) × total contract price. Revenue recognized over time as work progresses.

📚 About This CPA Exam Prep Practice Question

This 2-level CPA Exam Prep question from the Financial Accounting (FAR) topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CPA Exam Prep practice test or use flashcards for spaced repetition review.

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The percentage of completion method recognizes revenue:

✓ Correct Answer: Option B

📚 About This CPA Exam Prep Practice Question

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