EXERCISE 6–1 6. In accounting for long-term contracts, how does the percentage-of-completion method of revenue recognition differ from the completed contract method? (Choose one answer from

a, b,

c, or d below.)

i. Present value of income tax payments is minimized.

ii. Revenue for each period reflects more closely the results of construction activity during the period.

iii. Current status of uncompleted contracts is reported more accurately.
iv. Percentage-of-completion method relies less on estimates for both the degree of completion and the extent of future costs to be incurred.

a. i and ii.

c. ii and iii.

b. i and iii.

d. ii and iv.