How Should the Balances of Progress Billings and Construction in Progress

question 36

Multiple Choice

How should the balances of Progress Billings and Construction in Progress be shown at reporting dates prior to the completion of a long-term contract?

• A) Progress Billings as income,Construction in Progress as inventory
• B) Net,as income from construction if credit balance,and loss from construction if debit balance
• C) Progress Billings as deferred income,Construction in Progress as a current asset
• D) Net,as a current asset if debit balance and current liability if credit balance

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Definitions:

Ciliary Body

A structure in the eye that includes the ciliary muscle, which controls the shape of the lens, and the ciliary epithelium, which produces the aqueous humor.

Lysozyme

An enzyme found in saliva, tears, and other secretions, capable of breaking down bacterial cell walls to fight infection.

Bony Labyrinth

A complex system of passages and cavities within the temporal bone of the skull, important for hearing and balance.

Endolymph

A fluid within the membranous labyrinth of the inner ear that plays an essential role in the transduction of sound vibrations to neural signals.