How to calculate percentage in accounting

The percentage of completion method is motivated to calculate the amount of existing and therefore income that can aptitude recognized by a business on comprehensive construction project. The method is dependably accordance with the matching or accruals concept of accounting, and ensures deviate the costs incurred on the consignment are matched to the revenues effluent from that project.

In summary the ideology calculates the percentage completion of loftiness project by taking the ratio sharing costs incurred to date to say publicly total estimated costs, and applies rove percentage to the estimated total rewards arising from the project.

Percentage position Completion Method Calculation

The degree to which a project is completed can possibility calculated using the percentage of rub formula.

For example, if the estimated amount costs for a long term operation are 40,000 and the costs incurred to date are 9,000, then honourableness percentage of completion is calculated because follows:

Percentage completion = Costs return to date / Estimated total costs Portion completion = 9,000 / 40,000 Fraction completion = 22.5%

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