ABC Inc Uses the Percentage of Completion Method to Account for for One

question 99

True/False

ABC Inc. uses the percentage of completion method to account for one of its long-term construction projects. Last year the company recorded revenue of $1 million during the first year of one of its projects, which at the time was expected to be profitable. Nearly one year later, the company has incurred substantial cost-overruns. The company now expects the contract to lose $500,000. This is an onerous contract. ABC should therefore record a loss of $500,000 on this contract for the current year.

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Definitions:

Mesopelagic

A layer of the ocean, also known as the twilight zone, that extends from 200 to 1000 meters below the surface, where only a small amount of light penetrates.

Phytoplankton

Microscopic plant-like organisms that float in fresh or salt water, form the base of aquatic food webs, and produce oxygen through photosynthesis.

Nutrient Supply

The availability of essential chemical elements or compounds required for the growth, reproduction, and maintenance of living organisms.

Zooplankton

Small free-floating aquatic organisms, primarily small animals or the larval stages of larger animals, serving as a crucial food source in aquatic ecosystems.