Intermediate Accounting (16th Edition)

Published by Wiley
ISBN 10: 1118743202
ISBN 13: 978-1-11874-320-1

Chapter 18 - Revenue Recognition - Review and Practice - Using Your Judgment - Financial Reporting Problem - Page 1049: a

Answer

Theoretical justifications include; 1. The buyer is expected to satisfy his contractual performance obligations. 2. The contract calls out the enforceable rights regarding the considerations and terms of engagement. 3. The contractor is expected to satisfy his contractual performance obligations.

Work Step by Step

The percentage of completion method is widely adopted due to reliability of projected costs.
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