Under the Percentage-Of-Completion Method, How Should Earned but Unbilled Revenues

question 30

Multiple Choice

Under the percentage-of-completion method, how should earned but unbilled revenues on a long-term contract be disclosed on the statement of financial position?

• A)as construction in process in the current asset section
• B)as construction in process in the noncurrent asset section
• C)as a receivable in the noncurrent asset section
• D)in a note to the financial statements until the customer is formally billed for the portion of work completed

---

Definitions:

Foreland Basin

A basin that forms when crust (either continental or oceanic) is warped by the weight of thrust sheets, especially when formed between a mountain belt and continental interior.

Passive Margin

A tectonically inactive edge of a continent, characterized by a transition from continental to oceanic lithosphere without significant seismic activity.

Normal-Fault Basin

A low area that has been downdropped by one or more normal faults.

Passive Margin

A coastline margin that is not associated with plate boundaries and therefore experiences little to no seismic or volcanic activity.