Question

The journal entires used to recognize the costs of long-term construction contracts are identical when revenue is recognized upon completion and when it is recognized over time; however the two methods differ with respect to ___________.

Answer 1

Answer:

The timing of the revenue recognition

Explanation:

Journal entries for revenue recognition are accounting principles used to account for revenue realized using accrual accounting which is described as when revenue is recognized and earned upon completion. When revenue is recognized over time, all expenses are matched with their related revenues for the period, so that correct accounting period shows expenses and revenues realized in income statement.

These journal entires for revenue realized upon completion and when it is realized over time are identical except that they differ in the timing of the revenue recognition