Asked by Story Kremin on May 22, 2024
Verified
All of the following would be reported retrospectively by restating prior period's financial results except for a
A) change from the completed-contract method to the percentage-of-completion method for long-term construction contracts
B) correction of an error in previous periods
C) change to the full cost method (from the successful efforts method) for the extractive industry
D) change from the straight-line depreciation method to the sum-of-the-years'-digits method
Completed-Contract Method
An accounting method used where revenue and profit are deferred until a contract is completed, particularly useful in long-term projects.
Percentage-Of-Completion Method
An accounting method used to recognize revenue and expenses of long-term contracts proportionally to the amount of work completed.
Extractive Industry
Industries involved in the extraction of natural resources from the earth, such as mining, drilling for oil, or logging.
- Comprehend various approaches to accounting for extensive construction agreements and the effects on financial statements.
- Comprehend the principle of retrospective and prospective applications within the context of modifications in accounting.
Verified Answer
Learning Objectives
- Comprehend various approaches to accounting for extensive construction agreements and the effects on financial statements.
- Comprehend the principle of retrospective and prospective applications within the context of modifications in accounting.
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