Builders Inc

question 4

Multiple Choice

Builders Inc. entered into a contract to build a state-of-the art warehouse for Smith and Company for $18,000,000. Midway through the project, a dispute arose. fte dispute has not delayed the project; however, the dispute could affect the overall cost by $100,000. Builders Inc. uses the percentage-of¬completion method to account for its long-term contracts. Because of the dispute, Builders should:

• A) revise its estimates, recompute previous years' income and file amended returns for each year
• B) revise its estimates and base all subsequent income determinations on the new estimates
• C) reduce income in the year the dispute arose
• D) reduce income in the year the project is completed

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Definitions:

Id

A component of the personality in Freudian psychoanalysis that is driven by the pleasure principle.

Freud's Model

A theoretical framework for understanding human behavior and the mind, emphasizing unconscious processes, sexual and aggressive instincts, and early childhood experiences.

Unconsciously

Pertaining to the part of the mind that is inaccessible to the conscious mind but that affects thoughts and behaviors.

Gratification

The state of pleasure or satisfaction obtained from achieving a goal or fulfilling a desire.