Under the Completed-Contract Method

question 4

Multiple Choice

Under the completed-contract method,

• A)revenue, cost, and gross profit are recognized during the production cycle.
• B)revenue and cost are recognized during the production cycle, but gross profit recognition is deferred until the contract is completed.
• C)the contract-based approach to recognizing revenues would not be allowed.
• D)none of these.

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Definitions:

Federal Income Tax

A charge imposed by the United States federal government on the yearly income of individuals, corporations, trusts, and other legal bodies.

Withholding Allowance

Withholding allowance is an exemption that reduces how much income tax an employer deducts from an employee's paycheck, based on the number of allowances claimed.

Federal Income Tax

A financial duty enforced by the federal government on the yearly revenues of persons, corporations, trusts, and different legal organizations.

Gross Earnings

The total amount of money earned by an individual or business before any deductions or taxes are applied.