kaplan 2012 mock exam question – which topic is this question based on?

Question 40 of the kaplan 2012 mock F2 states:

Using the “cost incurred to date” method calculate how much of the following contract can be recognized.

Contract value 5,000,000
Value of work certified 3,000,000
Cost incurred to date: 2,000,000
Total costs of contract: 4,000,000

A. $ 500,000 (this is the right answer)
B. $ 1,667,000
C. $150,000
D. $100,000

Can someone please tell me exactly which topic this question covers in the F2 syllabus? I’ve read my whole BPP study text and have not found any such thing as “cost incurred to date” method to deal with contracts. The open tuition notes also don’t cover any such topic. Is this in our syllabus? And if yes, how do we solve to get the correct answer as A.

Please help!!!