With Respect to Delaying Revenue Recognition Until Completion of a Long-Term

question 46

Multiple Choice

With respect to delaying revenue recognition until completion of a long-term contract, it is the case that:

• A) Estimated losses on the overall contract are recognized before the contract is completed.
• B) Expenses are recognized each period, but revenue is only recognized when the contract is completed.
• C) Use of this approach is not permitted under generally accepted accounting principles.
• D) Neither gains nor losses are recognized until the contract is completed.