Percentage-of-completion method of accounting


The percentage-of -completion method of accounting for long-term construction-type contracts is preferable when:

a. Estimates of costs to complete and extent of progress toward completion are reasonably dependable.

b. The collectibility of progress billings from the customer is reasonably assured.

c. A contractor is involved in numerous projects.

d. The contracts are of a relatively short duration.

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Accounting Basics: Percentage-of-completion method of accounting
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