If the Completed-Contract Method Is Used,what Is the Basis for Determining

question 49

Multiple Choice

If the completed-contract method is used,what is the basis for determining the income to be recognized in the second year of a three-year contract?

• A) Cumulative actual costs incurred only
• B) Incremental cost for the second year only
• C) Latest available estimated costs
• D) No income would be recognized in year 2

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Definitions:

Customer

Someone who pays for a product or service.

Geoffrey Moore

An American organizational theorist, management consultant, and author known for his work on the technology adoption life cycle and marketing strategies for high-tech products.

Chasm

A significant gap or barrier that must be overcome, often used metaphorically in business and technology adoption contexts.

Technology Adoption Life Cycle

A model in sociology which explains how a new product or innovation is adopted or accepted, based on the demographic and psychological traits of specific groups of adopters.