Revenue Recognition Methods for Uncertain Income: Choosing the Right Approach

Not a Revenue Recognition Method for Uncertain Income: A Comprehensive Analysis

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Question

Which of the following is NOT a revenue recognition method when there is uncertainty surrounding the realizability of income?

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A. B. C. D.

A

The completed contract method is used for revenue recognition in the case of long-term contracts. In particular, it is chosen instead of the percentage-of- completion method if there are no reliable measures of the degree to which the contract obligations have been fulfilled.