When Using the Cost Recovery Method of Accounting for Long-Term

question 55

Multiple Choice

When using the cost recovery method of accounting for long-term construction contracts under IFRS, early in the life of the contract it is typically the case that:

• A) Expenses in excess of revenues are recognized.
• B) Revenues in excess of expenses are recognized.
• C) An equal amount of revenue and expense is recognized.
• D) There is no predictable pattern of revenue and expense.

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