Under the Earnings Approach, How Should Earned but Unbilled Revenues

question 19

Multiple Choice

Under the earnings approach, how should earned but unbilled revenues at the balance sheet date on a long-term construction contract be disclosed if the percentage-of- completion method of revenue recognition is used?

• A)As construction in process in the current asset section of the balance sheet.
• B)As construction in process in the noncurrent asset section of the balance sheet.
• C)As a receivable in the noncurrent asset section of the balance sheet.
• D)In a note to the financial statements until the customer is formally billed for the portion

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Definitions:

Asylums

Historic institutions designed for the care and confinement of individuals with mental illness or disability, often criticized for their conditions and treatment of patients.

Prisons

Institutions designed to securely house individuals who have been convicted of crimes, as part of the criminal justice system.

Poorhouses

Institutions operated by local governments to house and provide for the poor, elderly, and infirm who had no means to support themselves.

Incurable Social Ills

Reference to societal problems that are extremely difficult to solve or mitigate, often because of deep-rooted systemic issues or complex interdependencies.