Question

The principal advantage of the completed-contract method is that reported revenue reflects final results rather than estimates.

True
False

Answer 1

The completed-contract method is an accounting method that recognizes revenue only when a long-term construction contract is completed and accepted. This method provides a more accurate reflection of the final results of a project.

Step-by-step explanation:

The completed-contract method is an accounting method used to recognize revenue and expenses for long-term construction contracts. In this method, revenue and expenses are not recognized until the contract is completed and accepted by the customer.

The advantage of the completed-contract method is that it provides a more accurate reflection of the final results of a project, as revenue is only recognized when the project is fully completed.