When the completion stage of a contract is less than $$\frac{1}{4},$$ the total expenditure on the contract is transferred to . . . . . . . . account.

The correct answer is: Work-in-progress account.

A work-in-progress account is a temporary account used to track the costs of goods or services that are still in the process of being produced. When the completion stage of a contract is less than $\frac{1}{4}$, the total expenditure on the contract is transferred to the work-in-progress account. This is because the costs incurred on the contract are not yet considered to be expenses, as the goods or services have not yet been completed.

The other options are incorrect for the following reasons:

• Profit and loss account. The profit and loss account is a financial statement that reports a company’s revenues, expenses, and net income for a specific period of time. The costs incurred on a contract that is less than $\frac{1}{4}$ complete are not yet considered to be expenses, so they would not be included in the profit and loss account.
• Miscellaneous account. A miscellaneous account is a general ledger account that is used to track costs that do not fit into any other category. The costs incurred on a contract that is less than $\frac{1}{4}$ complete would not be considered miscellaneous costs, so they would not be included in a miscellaneous account.

I hope this explanation is helpful. Please let me know if you have any other questions.