Final answer:
Inventory is reported at cost plus gross profit recognized to date under the Percentage of Completion Method, which recognizes revenue incrementally during the progress of long-term contracts.
Step-by-step explanation:
Inventory is reported at cost plus gross profit recognized to date under the Percentage of Completion Method. This method is used for long-term contracts and it allows revenue, expenses, and profit to be recognized in increments as the contract progresses and before it is completed. This is in contrast to the Completed Contract Method, where revenue and profit are only recognized once the contract is fully completed. The Point of Sale Method recognizes revenue once the product or service is sold, and the Proportional Performance Method recognizes revenue in proportion to the goods or services delivered.