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

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Definitions:

Destructive Conflict

Conflict that dismantles rather than strengthens relationships.

Flexibility

The quality of being adaptable or willing to adjust to new conditions, situations, or changes.

Active Conflict

A situation where there is an overt disagreement or opposition between parties, often requiring direct attention and resolution.

Prior Conditions

Preexisting states or situations that influence or determine the context for future events or decisions.