The Principal Disadvantage of Using the Percentage of Completion Method

question 30

Multiple Choice

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

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

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