The Principal Disadvantage of Using the Percentage-Of-Completion Method of Recognizing

question 89

Multiple Choice

The principal disadvantage of using the percentage-of-completion method of recognizing revenue from long-term contracts is that it

• A) is unacceptable for income tax purposes.
• B) gives results based upon estimates which may be subject to considerable uncertainty.
• C) is likely to assign a small amount of revenue to a period during which a large amount of revenue was actually earned.
• D) no revenue is recognized during the contract.

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Definitions:

Anorexia Nervosa

An eating disorder characterized by an intense fear of gaining weight and a distorted body image, leading to severe restriction of food intake.

Amenorrhea

The absence of menstruation in a person of reproductive age, which can be categorized as primary or secondary.

Impaired Heart

A condition where the heart's functioning is below normal capacity, potentially affecting its ability to pump blood effectively.

Cognitive Component

Refers to the thoughts, beliefs, and knowledge one has about a given subject, part of the attitude component in psychology.