alleryStart learning →Under the completed-contract method, when are revenues recognised?
AWhen each progress bill is raised
BAfter the project is fully completed
CIn proportion to costs each year
DAt the date of contract signing
Answer & Solution
Correct answer: B. After the project is fully completed
Revenue, cost and gross profit are held back until the project is fully finished.
Keep practising Construction Contracts (AS 7)
Browse all Construction Contracts (AS 7) questions for CA Inter, or explore more Accounting topics.
Related questions
What does a guaranteed maximum price provide in a cost-plus contract?Unit cost contracts are often used for which type of construction?A lump sum and scheduled contract suits when what is true?Percentage of completion is an exception to which basic principle?Completion of production basis recognises revenue before sale for:Costs incurred plus recognised profits are reduced by which items?IAS 11 shows gross amount due from customers for contract work as:Excess of billings over costs on uncompleted contracts appears where?