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.