Cost Estimates at the End of the Second Year Indicate

question 28

Multiple Choice

Cost estimates at the end of the second year indicate a loss will result on completion of the entire contract.Which of the following statements is correct?

• A)Under the completed-contract method, the loss is not recognized until the year the construction is completed.
• B)Under the percentage-of-completion method, the gross profit recognized in the first year must not be changed.
• C)Under the completed-contract method, when the billings exceed the accumulated costs, the amount of the estimated loss is reported as a current liability.
• D)Under the completed-contract method, when the Construction in Process balance