Final answer:
The percentage of completion method is used by companies to recognize revenue over a period of time when the customer consumes the benefits.
Step-by-step explanation:
In accounting, there are two methods for recognizing revenue: the percentage of completion method and the completed-contract method. If a company wants to recognize revenue over a period of time when the customer consumes the benefits, it would typically use the percentage of completion method. This method recognizes revenue based on the percentage of work completed on the project.
For example, let's say a construction company is building a house for a customer. If the company estimates that it has completed 40% of the project, it would recognize 40% of the total revenue associated with building the house. This allows the company to recognize revenue as the project progresses.