Imagine That the Ace Construction Company (ACC) Concludes That It

question 260

Essay

Imagine that the Ace Construction Company (ACC) concludes that it must switch from recognizing revenue on long-term contracts over time according to percentage of completion to recognizing revenue upon completion of each contract. Assume that none of their construction projects are going to produce a loss. Is it possible that, in a particular year, ACC will show higher gross profit under the new approach (recognizing revenue upon contract completion) than they did under the old approach (recognizing revenue over time according to percentage of completion)? Explain.

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Definitions:

Varicella

A highly contagious viral infection, also known as chickenpox, characterized by a blister-like rash, itching, and fever.

Vesicles

Small fluid-filled sacs or blisters on the skin, which can result from infection, inflammation, or blistering disorders.

Circumscribed Skin Lesions

Localized changes in skin color or texture that are clearly defined and separated from the surrounding skin.

Snellen Chart

A chart used to evaluate visual acuity, identified by its lines of letters decreasing in size.