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If the outcome of a long-term contract can be measured reliably, the preferred accounting method under U.S. GAAP is: The cost recovery method. The completed
- If the outcome of a long-term contract can be measured reliably, the preferred accounting method under U.S. GAAP is:
- The cost recovery method.
- The completed contract method.
c. The percentage of completion method
2 Jasper Builders, Inc. incurs the following costs on a contract to construct a building for $2,000,000:
2006: $500,000
2007: 700,000
2008: 300,000
Total $1,500,000
Under the percentage of completion method, the projects net income in 2008 is closest to:
- $600,000
- $100,000
- $300,000
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