How Should the Balances of Progress Billings and Construction in Process

question 79

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

Differentiate between various types of financing such as venture capital, rights offerings, private placements, and debt offerings.

Explain the regulatory requirements and documents involved in the securities issuance process, including prospectuses and registration statements.

Describe the concept of rights offerings and the process for existing shareholders to maintain their proportionate ownership.

Recognize the impact of securities issuance on company’s stock price and understand the implications of underpricing or overpricing.

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Definitions:

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns to ensure a company's bookkeeping system is mathematically correct.

Transactions

Financial activities that involve the exchange of assets, services, or liabilities between two parties.

Ledger

An accounting book or computer file for recording and totaling economic transactions measured in terms of a monetary unit and categorized by account type.

Account Titles

Names given to the accounts that reflect the types of transactions they represent, used in bookkeeping to distinguish financial records.