Why does the percentage of completion method have lower liabilities than the completed contract method, i understand why it has higher assets and shareholders equity, but can’t seem to think of how it has less liabilities, couldn’t find it anywhere in the text… Thanks
not sure, but i cant imagine it would be necessary to know this for the exam.
Completed contract has a higher unearned revenue (the whole amount of the sale) ?
@ Completed contract has a higher unearned revenue (the whole amount of the sale) ? Not sure if its a correct statment. % of completion smoothns recognition of profits whereas completed contract recognizes profits only on completion of contract. % of completion is comparitivly mr aggrssive in terms of revenue recognition. But i dn’t think unearned revenue is recognized in completed contract…