Explain about percentage of completion method, Accounting Basics

Assignment Help:

Q. Explain about Percentage of completion method?

The percentage-of-completion method makes out revenue based on the estimated stage of completion of a long-term project. To calculate the stage of completion firms compare actual costs incurred in a period with the total estimated costs to be incurred on the project. To exemplify assume that a company has a contract to build a dam for USD 44 million. The approximate construction cost is USD 40 million. You compute the estimated gross margin as follows

715_Explain about Percentage of completion method.png

The firm distinguish the USD 4 million gross margins in the financial statements by recording the assigned revenue for the year and then deducting actual costs incurred that year. The formula to recognize revenue is as

(Real construction costs incurred during the period / Total estimated construction costs for the entire project for period) * Total sales price=Revenue recognized


Related Discussions:- Explain about percentage of completion method

The ratio of __________ to __________ is an example, The ratio of _________...

The ratio of __________ to __________ is an example of a __________ ratio. A. quick assets; current liabilities; leverage B. cost of goods sold; total assets; asset utilization

Cost accounting, DEFINITION OF COST ACCOUNTING DEFINITION:  as said by ...

DEFINITION OF COST ACCOUNTING DEFINITION:  as said by the Institute of Cost and Works Accountants (ICWA), London, Cost accounting is " the method of accounting for costs from t

Prepare a multi-level income statement and single step, how do i prepare a ...

how do i prepare a multilevel and single step income statement

Journal, Ledger is said to be the principal book entry and the transactions...

Ledger is said to be the principal book entry and the transactions can even be directly entered into the ledger account.” Elaborate and explain why journal is necessary.

What do you understand by goodwill, Q. What do you understand by Goodwill? ...

Q. What do you understand by Goodwill? Goodwill -- in accounting, difference between what a company pay when it buys theassets of another company and book value of those assets

Qualitative characteristics of financial reporting, Q. Qualitative characte...

Q. Qualitative characteristics of financial reporting? Accounting information must possess qualitative characteristics to be useful in decision making. This criterion is hard t

Example of periodic inventory procedure, Q. Example of Periodic inventory p...

Q. Example of Periodic inventory procedure? Periodic inventory procedure Merchandising companies selling small unit value merchandise such like nuts and bolts Christmas cards n

English, My sister considers Will Smith a _____ actor than Sean Penn. (Poin...

My sister considers Will Smith a _____ actor than Sean Penn. (Points : 2) more better best better

the relevant authoritative literature, Determining the physical quantity t...

Determining the physical quantity that should be contained in inventory normally is a simple matter because that amount have of items in the possession of the company. The cost of

Can you explain about balance sheet, Q. Can you explain about balance sheet...

Q. Can you explain about balance sheet? The balance sheet, sometimes called as the statement of financial position lists the liabilities, company's assets and stockholders' equ

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd