Look-Back Interest May Be Required on Long-Term Contracts If Actual

question 105

Multiple Choice

Look-back interest may be required on long-term contracts if actual total costs had been employed in determining gross profit rather than estimated costs in earlier years of the contract.The interest will not be assessed if

• A)the completed contract method is used.
• B)the contract is completed within two years of the commencement date.
• C)the contract price is less than $1 million.
• D)All of the above are correct.

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Definitions:

Inhalants

Substances that are sniffed or inhaled to achieve a quick high, often household or industrial chemicals.

Admitted

The act of conceding or acknowledging something, often used in the context of accepting individuals into medical or rehabilitative facilities.

Older

A term generally referring to individuals or things of greater age, often associated with increased wisdom or experience.

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