How Should the Balances of Progress Billings and Construction in Process

question 139

Multiple Choice

How should the balances of progress billings and construction in process be shown at reporting dates prior to the completion of a long-term contract?

• A) Progress billings as deferred income, construction in progress as a deferred expense.
• B) Progress billings as income, construction in process as inventory.
• C) Net balance, as a current asset if debit balance, and current liability if credit balance.
• D) Net balance, as income from construction if credit balance, and loss from construction if debit balance.

---

Definitions:

Effect Of Law

Describes the impact or consequence that a law has once it has been enacted and is enforceable.

Administrative Law Judge (ALJ)

A judge who presides over an administrative hearing; may attempt to get the parties to settle but has the power to issue a binding decision.

Administrative Law Judge (ALJ)

An official who presides over federal administrative hearings, making decisions on disputes within specific agencies.

Binding Decision

A legal determination made by a court, arbitration panel, or regulatory agency that is final and must be followed by the parties involved.