DQuestion 11 2 pts If an overall loss is first anticipated in the second year of

Question

DQuestion 11 2 pts If an overall loss is first anticipated in the second year of a previously estimated to be proftable long-term contract (where estimated profit had been correctly recorded in the first year), the use of the percentage of completion method will result in a year 2 reported loss: Larger than would be recognized under the completed contract method. O Smaller than would be recognized under the completed contract method. Equal to the amount that would be recognized under the completed contract method. O All of the above

Explanation / Answer

Larger than would be recognized under the completed contract method

Because previous year anticipated profit need to revised in year 2 and also actual loss need to be recognized.

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