Which of the Following Statements Does NOT Describe a Long-Term

question 116

Multiple Choice

Which of the following statements does NOT describe a long-term construction project that is accounted for under the completed-contract method?

• A) Revenues are recognized at the end of the contract.
• B) Revenues are recognized evenly throughout the contract.
• C) Gross profit is recognized at the end of the contract.
• D) Losses are recognized immediately.

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Definitions:

Cash Dividend

A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting liabilities, representing the ownership interest of shareholders.

Preferred Dividends

Dividends that are paid to preferred shareholders before any dividends are paid to common shareholders.

GAAP

GAAP, or Generally Accepted Accounting Principles, are a set of accounting standards and procedures used in the United States to govern financial reporting and ensure consistency across industries.