Revenue Recognition Flashcards
1
Q
Installment sales method
A
GP% is applied to the cash collected.
2
Q
Cost Recovery method
A
No profit is recognized until cash equal to the cost of the asset is received.
3
Q
Percentage of completion
A
For a long-term construction project, the percentage of completion method is applied if the estimations are reasonable, the company has the ability to complete the project, and the other party is able to make the contracted payments.
