A Taxpayer Who Is Required to Use the Percentage of Completion

question 6

True/False

A taxpayer who is required to use the percentage of completion method can elect to defer the recognition of income and the related costs until the taxable year in which cumulative contract costs are at least 10% of the estimated contract costs.

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Definitions:

Referent Power

Referent power is a form of influence based on the charismatic appeal or personal attraction of the power-holder, leading others to identify with or seek approval from the individual.

Kelman's Sequence

A theory of social influence which outlines three processes through which attitudes can change: compliance, identification, and internalization.

Compliance

The tendency to agree to do things requested by others, often to fit in with societal expectations or demands.

Internalization

The process by which individuals accept and assimilate the norms, values, or beliefs of a group into their own belief system.