Under the Completed-Contract Method of Revenue Recognition, Partial Billings Could

question 56

Multiple Choice

Under the completed-contract method of revenue recognition, Partial Billings could be reported on the balance sheet as a $\begin{array}{lll}& \text { Contra Asset}& \text { Current Liability}\\\text { I. } & \text { Yes } & \text { Yes } \\\text { II. } & \text { Yes } & \text { No } \\\text { III. } & \text { No } & \text { Yes } \\\text { IVI } & \text { No } & \text { No }\end{array}$

• A)I
• B)II
• C)III
• D)IV

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Definitions:

Buying Stocks

The act of purchasing shares in a company with the expectation of earning a return on investment through dividends or stock price appreciation.

Cash Flow

Cash flow refers to the net amount of cash and cash-equivalents being transferred into and out of a business.

Direct Method

A cash flow statement preparation approach that involves reporting major classes of gross cash receipts and payments.

Accounts Receivable

Outstanding payments from customers to a company for products or services already rendered.