The Principal Disadvantage of Using the Percentage of Completion Method

question 30

Multiple Choice

The principal disadvantage of using the percentage of completion method of recognizing revenue from long-term contracts is that it

• A) Is unacceptable for income tax purposes
• B) May require that intraperiod tax allocation procedures be used
• C) Gives results bases upon estimates that may be subject to considerable uncertainty
• D) Is likely to assign a small amount of revenue to a period during which much revenue was actually earned

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Definitions:

Within Group Friendships

Relationships characterized by personal bonds and affinities that develop among members within the same group or team.

Probing Teams

Teams that are designated or tasked to investigate, analyze, and find solutions to complex issues or unknown problems within an organization.

Internal Processes

Internal Processes refer to the operations and activities that occur within an organization to ensure its effective functioning and to meet its goals.

Outside Contact

Interaction or communication between members of an organization and individuals or groups external to it.