Under the Percentage-Of-Completion Method, How Should the Balances of Progress

question 441

Multiple Choice

Under the percentage-of-completion method, how should the balances of progress billings and construction in process be disclosed in the financial statements prior to the completion of the 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, as a current asset if a debit balance, and a current liability if a credit balance.
• D)Net, as income from construction if a credit balance, and loss from construction if a debit
• Balance.

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