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

question 129

Multiple Choice

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

• A) May require that inter-period tax allocation procedures be used.
• B) is likely to assign a small amount of revenue to a period during which much revenue actually was earned.
• C) is unacceptable for tax purposes.
• D) Gives results based upon estimates, which may be subject to considerable uncertainty.