In Using the Percentage of Completion Method, Annual Income to Be

question 18

True/False

In using the percentage of completion method, annual income to be reported from a contract is determined in part by comparing actual costs incurred to total estimated costs.If total actual costs are less than that which were originally estimated, the taxpayer is required to pay the IRS interest.

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Definitions:

Notify the Third Party

The act of informing someone not directly involved in a transaction or agreement about relevant information or developments.

Disclosed Principal

A principal whose identity is known by the third party at the time a contract is entered into with the agent acting on behalf of the principal.

Signs the Contract

The act of agreeing to a contract's terms and legally binding oneself by signing a document.

Nondelegable Duty

An obligation or duty that cannot be transferred to another party and must be performed by the individual or entity originally charged with it.