A Company Changes from Percentage-Of-Completion to Completed-Contract Method, Which Is

question 25

Multiple Choice

A company changes from percentage-of-completion to completed-contract method, which is used for tax purposes. The entry to record this change should include a

• A) debit to Construction in Process.
• B) debit to Loss on Long-term Contracts in the amount of the difference on prior years, net of tax.
• C) debit to Retained Earnings in the amount of the difference on prior years, net of tax.
• D) credit to Deferred Tax Liability.

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Definitions:

Inner Ear

The innermost part of the ear, containing the cochlea, vestibule, and semicircular canals, responsible for hearing and balance.

Tympanic Cavity

The air-filled space located in the middle ear.

Ossicles

Small bones in the middle ear that transmit sound from the air to the fluid-filled labyrinth (cochlea).

Inner Ear

The innermost part of the ear, consisting of the cochlea, vestibule, and semicircular canals, crucial for hearing and balance.