The Principal Disadvantage of Using the Percentage of Completion Method

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