Under the Percentage-Of-Completion Method, How Should Earned but Unbilled Revenues $\bold{\text{contract asset/liability}}$

question 109

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 \(\bold{\text{contract asset/liability}}\) in the current asset section
• B) as \(\bold{\text{contract asset/liability in}}\) 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:

Merger Arbitrage

An investment strategy that aims to profit from the successful completion of mergers and acquisitions by trading the stocks of the companies involved.

Risk Profile

An evaluation of an individual's willingness and ability to take risks, as well as the risks associated with their investment assets.

Performance Evaluation

The assessment of how investments or portfolios have performed over time, considering factors like return, risk, and comparison to benchmarks.

Mispricing

The occurrence when the market price of a security does not accurately reflect its intrinsic or theoretical value, leading to potential buying or selling opportunities.