Question

For many years, long-term contracts that qualified for recognition over time were accounted for using an...

For many years, long-term contracts that qualified for recognition over time were accounted for using an approach called the ________ method, and those that did not qualify for recognition over time used a method called _________.

percentage-of-completion; completed contract

completed contract; percentage-of-completion

billings in progress; deferred recognition

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Answer #1

Answer:

Percentage of completion; Completed contract.

Explanation:

For many years, long-term contracts that qualified for recognition over time were accounted for using an approach called the Percentage of completion method, and those that did not qualify for recognition over time used a method called completed contract.

Percentage of completion method are those in which Revenue is recognised as per percentage of completion of contract. For example if contract price is $100000 and contract period is 3 years then Revenue will be recorded all 3 years as per percentage of completion.

Under completed contract method Revenue is Recognised as when contract is completed.

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