Question

Whispering Company is constructing a building; what method uses weighted average accumulated expenditures?

a) Straight-line depreciation
b) Double-declining balance depreciation
c) Percentage-of-completion method
d) Units-of-production method

Answer 1

The method that uses weighted average accumulated expenditures is the Percentage-of-completion method.

Step-by-step explanation:

The method that uses weighted average accumulated expenditures is the Percentage-of-completion method.

This method is commonly used in construction projects to recognize revenue and expenses as the project progresses. It calculates the ratio of costs incurred to date compared to the total estimated costs of the project. This ratio is then applied to the total expected revenue to determine the amount of revenue recognized.

For example, if Whispering Company has spent 40% of the estimated costs for the building project, they would recognize 40% of the expected revenue.