Which statement best describes costs to date in the percentage-of-completion method?

Which statement best describes costs to date in the percentage-of-completion method?

• A. Total estimated costs for the entire project.
• B. Estimated costs remaining to complete the project.
• C. Actual costs incurred to date on the project.
• D. Actual costs incurred to date on the project.

Answer: (D)

In the percentage-of-completion method, progress is measured by the ratio of costs incurred to date to total estimated costs. Costs to date are the actual expenditures that have been incurred on the project up to the reporting date. This amount serves as the numerator in the completion percentage, directing how much revenue and gross profit to recognize so far. It reflects what has actually been spent, not what is estimated to be spent in total or what remains to be done. So the costs to date are the actual costs incurred to date on the project.

In the percentage-of-completion method, progress is measured by the ratio of costs incurred to date to total estimated costs. Costs to date are the actual expenditures that have been incurred on the project up to the reporting date. This amount serves as the numerator in the completion percentage, directing how much revenue and gross profit to recognize so far. It reflects what has actually been spent, not what is estimated to be spent in total or what remains to be done. So the costs to date are the actual costs incurred to date on the project.