Which of the following would occur prior to the completion of a long-term contract when using the completed-contract method as opposed to the percentage-of- completion method?
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A. B. C. D. E.A
A firm's income tax liability is lower under the competed-contract method because revenues and related income taxes on profits are deferred until the contract is completed. The percentage-of- completion method would recognize revenues earlier and would generate higher current period income tax liabilities.